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BUSINESS EXCELLENCE Issue No.18 | www.bus-ex.com

PPC Ltd African Minerals Adrok

Hawk Measurement Systems (HAWK)

HAWK’s eye view A world leader in the design, manufacture and provision of level, positioning and flow measurement systems

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contents

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Lead story

How big miners are reliving the late 90s bust It looks like the late 90s are back in vogue in the mining industry.

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CSR

Canadaâ&#x20AC;&#x2122;s mining CSR changes

Strategic improvements to Canadaâ&#x20AC;&#x2122;s mining governance policy are welcome, but more is needed according to EWB.

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event preview

Mines & Money London 2014 Previewing the annual event where quality mining projects meet investors and secure capital.

cover story

20 Hawk Measurement Systems (HAWK)

HAWKâ&#x20AC;&#x2122;s eye view Hawk Measurement Systems (HAWK) is regarded as a world leader in the design, manufacture and provision of level, positioning and flow measurement systems, with exports to over 30 countries across a range of industries, including mining, water, food, power stations and cement.

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africa

50

americas

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Adrok

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Praxis

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Exploring new possibilities Over the last twelve months Adrok has experienced significant gains to its presence in key North American markets and its acceptance into important sectors of industry.

Aggregating service Praxis is already known as a reliable partner for crushing services: it has grown through excellence in the way it manages its assets to deliver services to major customers.

No-Spill™ Systems

PPC Ltd

Sustainability the key for future development Operating in some of Africa’s most important developing nations, PPC Ltd is well on its way to becoming a leading emerging-market business, and a responsible, sustainable one at that.

African Minerals

A year to remember Mike Jones, discusses the incredible progress made by African Minerals during 2013 and why 2014 is shaping up to be even better. europe

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Alacer Gold

Sulphide and oxide in golden harmony Alacer operates the world-class Çöpler gold mine that produced a record gold figure during 2013.

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Inspired innovation No-Spill™ Systems’ commitment is to provide fluid draining solutions that provide high quality and eco-friendly results, and measures its success on its ability to exceed its customers’ expectations

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Greenland special report

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Facts & Figures

Greenlandâ&#x20AC;&#x2122;s vital statistics

Some key facts and figures about the mining industry in Greenland.

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feature

Arctic elements

An in depth examination on how Greenland has prepared to enter the world stage as a major supplier of minerals.

96 Sponsor

The BANK of Greenland

A small bank with big influence The bank is without comparison the strongest local collaborator to help you with financing and assistance concerning day-to-day operations.

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120 True North Gems

The Mine her ancient Ruby yields An exciting gemstone project promises to be the first fruit of Greenland’s new mining era: we spoke to True North Gems’ enthusiastic President and CEO about building a new industry.

128 GME

104 Royal Arctic Line

Greenland’s lifeline Boasting more than 20 years of internal experience of sailing in Arctic waters, Royal Arctic Line and its employees have become a massively important lifeline for Greenland and the surrounding region over the last two decades.

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North American Nickel (NAN)

Put a lot more nickel in The resource that North American Nickel (NAN) expects to define this summer on its Greenland property could be a game changer not just for Greenland but for the countries that depend on this vital metal to develop their industries and infrastructure.

Where clean power starts The Kvanefjeld Project of Greenland Minerals and Energy has been boosted by a new technical partnership and progress in both Greenland and Denmark towards regulation for radioactive materials.

138 Tanbreez

Ready to roll The world needs rare earths in quantities and Greenland needs inward investment, employment and the chance to trade in global markets.

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[ Issue 18 ] BE Mining

How big miners are reliving the late 90s bust It looks like the late 90s are back in vogue in the mining industry Words by

Steve TodorukÂ

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S

teve Todoruk, a mining veteran who joined Rick Rule in 2003 at Sprott Global Resource Investments Ltd. says he’s seeing some key similarities between today and the last big bear market for resource stocks, which lasted from around 1998 to 2001. Many of today’s mining legends made their reputation and their fortune during that time.

The last time we saw this happen was in the late 1990s.

Gold was around $300 per ounce; silver was near $6; and copper was $0.60 a pound.

Commodity prices had fallen so much that big miners were producing near or below the sale price of their product. In some cases, the more they produced the more money they lost.

Many mines had been shut down or were in the process of closing due to their inability to produce a profit.

Copper miners needed around $1.10 per pound to make a decent profit. At $0.60 these companies were losing their shirts.

In the gold space, Goldcorp was one of the very few miners to eke out a small profit because they had only one mine, which happened to be one of the richest high-grade gold mines in the world.

Today, most industry experts believe that the ‘all-in sustaining cost ’ to produce one ounce of gold is somewhere between $1,000 and $1,300. The all-in sustaining costs include all the costs of running current mining operations

plus cash spent finding new ounces to replace mined reserves. Gold is trading around $1,200 right now, which means that most companies are probably losing money or breaking even. Few are making any kind of a profit.

An important difference between the late 90s and today is the amount of hedging. In the 90s, companies often sold their gold forward (hedged), so when gold prices fell to $300, they had pre-sold a lot of their production at over $400 per ounce -- enough to keep many mines open that would have almost definitely been shut down otherwise.

Over the last decade, investors demanded full exposure to a rising gold price as the reason to buy shares in producing miners. Companies listened and almost all eventually got rid of their hedging agreements. Few or none of the big producers hedge any gold to speak of.

As a result, gold miners today don’t have the benefit of having hedged some of their gold production at higher prices.

They have to sell their production at the current market.

One temporary measure they can use is to mine only the high-grade areas of their deposit, but that game cannot last long and can greatly reduce the long-term production potential of a mine.

Throughout my life, I’ve been through 5 cycles in commodity prices, which correlate to bear markets and bull markets

“In the 90s, companies often sold their gold forward (hedged), so when gold prices fell to $300, they had pre-sold a lot of their production at over $400 per ounce ”

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lead story

“One indication that a company may be viable is its ability to continue to raise funds in a bear market.

On the other hand, the companies that cannot raise money tend to go quiet”

in mining stocks. Some cycles are more dramatic than others, but they all pretty well play out in the same way. You see a decline in the prices of the commodities and the share prices of the producers, followed by a rise in commodity prices and rising share prices.

In the late 1990s, the miners needed to start making money if the world economies wanted to continue having a supply of metals. This would also make money available for exploration of new deposits of gold, silver, copper, uranium, or other metals.

Smart investors bought shares in some of the miners since they stood to make money if commodity prices went up. They also bought up exploration companies with deposits that would increase substantially in value if metals prices rose. One of these companies was Bob Quartermain’s Silver Standard Resources (SSRI).

Ross Beaty of Pan American Silver (PAAS) was one of the ‘smart investors’ in the space. He went out and acquired a number of copper deposits that he believed were cheaply priced, and he was well-rewarded. My boss Rick Rule started his first two Limited Partnerships in 1998 and 2000, buying shares in companies like Silver Standard and Pan American Silver, to the delight of his investors when commodity prices started to rise in the early 2000s.

Today may offer a similar opportunity for investors. The miners are hurting. Mines

may soon start shutting down, and that pain is also killing junior mining stocks.

There always will be a mining industry.

The world needs the metals. The world also needs the junior miners since they make most of the discoveries which the majors end up turning into mines. Some companies will therefore survive – but probably not all.

One indication that a company may be viable is its ability to continue to raise funds in a bear market. On the other hand, the companies that cannot raise money tend to go quiet. They slow down or become inactive. Some merge with other companies or get bought out, and some simply close up shop.

It’s time to respond like we’re right back in the 90s. Just like the ‘smart investors’ of that period, we want to choose the survivors that could become much more valuable if metals prices rise.

About the author

Steve Todoruk Steve Todoruk worked as a field geologist for major and junior mining exploration companies after he graduated with a B. Sc. in Geology from the University of British Columbia, in 1985. Steve joined Sprott Global Resource Investments Ltd. in 2003 as a Senior Investment Executive. stodoruk@sprottglobal.com

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Canada’s mining CSR changes Strategic improvements to Canada’s mining governance policy are welcome, but more is needed according to EWB Words by

John O’Hanlon

csr

C

anada’s enhanced Corporate Social Responsibility (CSR) Strategy, “Doing Business the Canadian Way: Advancing Corporate Social Responsibility in Canada’s Extractive Sector Abroad” was announced by the Canadian government on November 14. It builds on experience and best practices gained since the 2009 launch of Canada’s first CSR strategy, “Building the Canadian Advantage: A Corporate Social Responsibility Strategy for the Canadian Extractive Sector Abroad.” The idea is that Canadian companies operate abroad with the highest ethical standards.

The international development organisation Engineers Without Borders Canada (EWB) has welcomed several of the improvements made, while encouraging the Canadian government to demonstrate further leadership by closing critical gaps in the recently tabled Extractive Transparency Measures Act. While mineral and fossil fuels are widely seen as potential drivers of economic and social development in resource rich countries, these positive outcomes are not guaranteed, says EWB. One of the core improvements in Canada’s revised CSR Strategy is that it recognizes these benefits are only fostered under certain conditions, and strives to help create them.

Strong supply chain linkages between international companies and local businesses is one of these critical conditions. As a result, the Strategy’s commitment to help Canadian companies purchase more goods and services from the countries where they operate is a welcome demonstration of leadership.

“Local spending on goods and services leads to more local jobs and income, transfers skills and technology and helps to create vital domestic business networks,” says Jeff Geipel, EWB’s head of Mining Shared Value: “The announcement that Canada’s trade

commissioners will work with Canadian extractive companies to increase local procurement is an important commitment to improving social impacts.”

Improved transparency is also a vital condition for decreased corruption and enhanced accountability, which are key to ensuring citizens benefit from the extraction of their country’s natural resources, he believes.

Canada’s continued focus on increasing extractives transparency, demonstrated most recently by the commitments in the Strategy and the recently tabled Extractive Sector Transparency Measures Act, is a strong step in the right direction.

However, although the Strategy commits to ensuring Canada’s transparency standards are aligned with emerging international requirements in the United States and the European Union, there are key areas of the legislation that fall short of meeting this commitment. “We are very concerned that Canada’s Extractive Transparency Measures Act does not require payments that extractives companies make to governments be broken down by project or type,” says Samantha Burton, EWB’s Director of Policy and Advocacy, “Not only does this put Canadian legislation out of sync with US and EU requirements, but without this level of detail citizens and communities will not be able to effectively use this information to hold their government to account.”.

for more information

Jeff Geipel Venture Leader - Mining Shared Value Engineers Without Borders Canada www.ewb.ca

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Mines & Money

Where quality mining projects m Mines and Money London 2014

1-5 December 2013 Business Design Centre, London Much of the mining industry and the supporting investment sector is starting to prepare for Mines and Money 2014. The event is looking bigger and better than previous years with many improvements to the programme developed in conjuntion with market research from the mining community.

Some of the enhancements this year include Better content Africa, Latin America and Europe were key regions of interest from the market. so the first day has changed from ‘Canada and Australia’ day to an ‘Around the World Mining Investment day’ with content covering all the continents.

There are 3 new streams in response to feedback: • Commodities investing – 2 December • Base, bulk and industrial metals – 3 December • Mining for Good summit – 4 December Better speakers There was significant demand for fresh speakers who hadn’t appeared on the programme before.

For 2014 there will be the opportunity to learn from over 200 industry experts of which over

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50% have never spoken at the event before to guarantee that you will get fresh insights.

Better networking Through the event there are numerous networking opportunities. Everyone who registers will get the opportunity to use the one-to-one planner where you can pre-arrange meetings with our delegates.

A variety of interactive roundtables where you can have more informal discussions on a particular topic with a smaller group of people.

Drinks receptions on the first 3 days including the now famous Women in Mining drinks reception on 3rd December that this year has a “Find the Diamond in the champagne glass” theme.

Last but my no means least there is a Gala Dinner and Mining Journal Outstanding Achievement Awards on December 4th. This year is extra special as the awards and gala dinner takes place on St Barbara’s Day, the patron saint of mining.

Better value Qualified investors still go free, although for 2014 there is a more proactive policy to target the leading institutional fund managers, investors and private equity players that are actively looking at and investing in the mining industry.

In response to the tough market conditions Mines and Money have also introduced a lower price for mining companies.

event preview

y London 2014

meet investors and secure capital

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Potash for produce South Boulder MineS is a 50% owner of the Colluli Mining Share Company (CMSC) which is currently developing the Colluli Potash Project in Eritrea, East Africa.

The Colluli resource contains over 1 billion tonnes of potassium bearing salts suitable for the production of potash. South Boulder Mines is managing a pre-feasibility study for the production of sulphate of potash (SOP), an essential fertiliser for high value crops which achieves a substantial price premium over regular potash (potassium chloride). The combination of salts in the Colluli resource supports low energy input, high potassium yield conversion to potassium sulphate using a simple, proven process, which has been validated by metallurgical testwork.

The study will be complete in February 2015.

Visit us at booth F10 to find out more.

For more information contact: Paul Donaldson e pdonaldson@southbouldermines.com.au t +61863151409

www.southbouldermines.com.au

event preview

Keynote speakers NEW FOR 2014

Ross Beaty, Chairman, Pan-American Silver

Frank Giustra, President & CEO, Fiore Financial Corporation Founder Lions Gate Entertainment

Clem Sunter, Scenario Planner and Former Chairman & CEO Gold and Uranium Division Anglo American

BACK BY POPULAR DEMAND

Frank Holmes CEO and Chief Investment Officer US Global Investors

Peter Grosskopf CEO Sprott Asset Management

Mark Bristow CEO Randgold Resources

Why do you attend Mines and Money?

Mines and Money London is Europe’s leading mining investment and capital raising conference and exhibition, bring together over 3,000 investors, financiers, brokers and mining developers, for up to five days of business matching, knowledge sharing and deal-making.

Investors: • Discover and meet pre-qualified junior mining projects across all commodity classes to evaluate winning investment opportunities • The only event which brings together over 200 mining companies from 5 continents for you to assess in just 1 week.

• Investment, country/regional and commodity roundtables enabling you to discuss the latest market trends and opportunities in a more intimate environment • New for 2014 – a greater focus on mid-tiers and majors both in terms of content and targeted attendance Mining companies: • Mines and Money London attracts 1000+ investors from all stages of the mining investment cycle: private investors, boutique asset managers, large fund and private equity players, institutional investors – a one stop shop to access capital and solve your funding requirements • D etailed discussion on how to access alternative forms of finance such as streamed and royalty models in light of the ongoing liquidity crunch

“Mines & Money is the premier mining conference in London bringing together all of the relevant stakeholders in the industry” Stewart Dickson, Managing Director Cantor Fitzgerald Europe

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www.northamericannickel.com

TSX-V: NAN WSCRF:US Frankfurt: N84

MANIITSOQ, GREENLAND

The World’s Next Nickel Sulphide District?

ICE AFFECTED WATERS

MANIITSOQ

GREENLAND Nuuk OPEN WATERS

Raglan

Voisey’s Bay

CANADA

MANIITSOQ PROJECT

Long Harbour Montreal Toronto

Highlights North American Nickel Inc. is a Canadian junior mineral exploration company focused on advancing and developing high quality Ni-Cu sulphide projects.

The Company’s key asset is its 100% owned Maniitsoq Project located in southwest Greenland. North American Nickel is listed on the TSX Venture exchange and is well funded with strong cornerstone investors.

• 3,601 sq km land package with potential to host a new nickel district • Property encompasses 75 km x 15 km Greenland Norite Belt hosting numerous Ni-Cu sulphide prospects and > 200 exploration targets • High grade nickel sulphide mineralization (locally over 7% Ni) at the Imiak Hill Complex • Exciting new intersections of mineralized norite at widely spaced regional targets (Fossilik, Pingo, P-013 and P-053) • Geological setting with similarities to major nickel deposits of Thompson and Voisey’s Bay • Only 25% of property covered by helicopter-borne electromagnetic geophysical surveys • Large exploration program planned for 2015

About Greenland • Stable, democratic country with pro-mining government • Transparent regulatory system with competitive mining tax regime and no land claim issues • Southwest coast free of pack-ice due to warm ocean currents enabling year round shipping • Capital of Nuuk is a modern, well serviced port with European standard logistical support services

Visit us at booth E28 to find out more.

Tel: 604.986.2020 info@northamericannickel.com

event preview

Delivering 3,000 Attendees

200 Leading experts speaking

200 Mining companies in the exhibition

1,000 Investors and financiers in attendance

75 Countries represented

“Very impressed by the knowledge and expertise of the speakers, particularly when they were prepared to predict the future direction of metal prices” Richard Allen, Asset Manager, Parks Allen Capital

• An event with a 12 year record of deal making: it’s where the mining and investment industries come to do business. Whether you are an explorer looking to raise initial investment, or a junior miner developer looking to take your company to the next level of growth, this is for you.

• By request we are limiting the number of mining service providers to ensure that Mines and Money continues to deliver a dedicated mining investment and capital raising forum.

Mining service providers: • Europe’s only event which brings together 3000 miners and investors • Take advantage of our one-toone meeting system enabling you to maximise your networking at the event

If you want to find out how to attend visit www.minesandmoney.com for more information. Keep an eye out in the next issue for our complete guide to the event programme.

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HAWKâ&#x20AC;&#x2122;s eye view Hawk Measurement Systems (HAWK) Hawk Measurement Systems (HAWK) is regarded as a world leader in the design, manufacture and provision of level, positioning and flow measurement systems, with exports to over 30 countries across a range of industries, including mining, water, food, power stations and cement

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t’s not random chance that puts mining at the head of the list of industries – and it’s a long list – that HAWK serves.

HAWK is an Australian company, founded in 1988 with a focus on serving that country’s resources sector with locally designed and produced products. Over the years the company has expanded into different geographic areas, mainly into countries with a mining presence, working through a network of specialised distributors. Today, with the export demand for level measurement growing because of the global mining boom and water crisis, HAWK is forging into emerging markets including China, India and South America.

And HAWK has a growing presence in the North American market. Jack Evans, formerly President and CEO of German competitor Krohne’s USA subsidiary, founded his own company near Boston Massachusetts exclusively to distribute HAWK products to the North American market, something he did so effectively that two years ago HAWK’s CEO Les Richards bought the company. Evans is still CEO of that operation, combining the job with that of director of global operations for HAWK from the company’s headquarters in Melbourne.

He puts the company’s success down to the level of support it gives its customers. “For me that is the critical thing. Of course HAWK is the global leader in having exceptional and

I

“For me support is the critical thing … Hawk is the global leader in having exceptional and innovative products but that alone wouldn’t be a sufficient basis for growth”

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Process control solutions for mining

Hawk Measurement Systems (HAWK)

“Mining companies can’t run a lean operation without the best measurement”

innovative products but that wouldn’t be a basis for growth on its own. I say that from experience.

In the USA distribution of product is effected by hiring the right independent manufacturers and organisations and training them to be able to support the customers. Throughout my career I have helped customers grow by supporting them at every stage and that philosophy is the foundation for HAWK’s growth today too.”

The greater part of HAWK’s sales are still in Australia, but over the years it has expanded into many other markets, initially by striking agreements with specialist mining distributors but also working directly with the major extraction and processing concerns. HAWK lists Rio Tinto, BHP Billiton, Xstrata, Outotec and FLSmidth Minerals among its impressive line-up of international customers. “Mining companies can’t run a lean operation without the best measurement. They are competing with other companies and the ones that are the most efficient at getting the ore out of the ground, processing it and selling it are the ones that are doing well. We help them do that,” he asserts. And since the technology has applications in a host of other industries, notably chemical process and the oil & gas sector but including cement, pulp & paper, and food, the company has expanded its research focus to develop custom solutions for them.

Right now, says Evans, HAWK is exploring exciting opportunities in the growing water and wastewater industries.

It is also expanding its geographical footprint, and about six years ago entered

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Microwave blocked chute protection

the China market by setting up a joint venture sales company, the Chongqing HAWK Chuan Yi Instrument Co. Ltd. HAWK’s forward strategy is definitely to continue to lead with its products for mining, which include advanced monitoring systems for thickeners, slurry tanks, tailings dams and many more applications. At the same time it will ensure continuity during mining’s periodic slowdowns by developing product for other sectors. “Our research teams are currently very busy developing new products for our oil & gas (O&G) customers. One of those is using fibre optic for pipeline monitoring, which is able to give us more information from a single sensor,” he reveals. The technology uses ‘smart sensors’ distributed across the network. These are able to identify anomalies in pressure, temperature and sound and send that information, together with the precise location and size of any leak to the control room in real time. The system is robust and reliable enough to be used in the harshest environment, and combines external and internal monitoring. The sound element is particularly interesting in places where pipeline security is an issue, as it can detect anyone digging, or even walking near the pipe. The product is being tested now and its launch is eagerly anticipated. “This is a crossover product that will be valuable in the water and wastewater market, where it is particularly useful in older infrastructures,” he says.

Crossover is a feature of many HAWK innovations. Flow of materials is after all a universal matter. The company’s new generation of microwave products is a case in point - devices used among other things for blocked chute detection and analysis in

“The New Generation Gladiator Microwave products have proved very effective in eliminating false trips”

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Hawk Measurement Systems (HAWK)

Ship loader positioning and protection

mines. It is, he explains, a circular mining but the same microwave Did you know? product is used for shiploading polarised device which eliminates and also for collision detection the problem of false tripping. and prevention.

“Whatever the mineral, if there is 25% Water management is a moisture present it can block the Of revenues big problem in mining, one to chute and you have to shut down devoted to R&D which HAWK has addressed its the operation. But false tripping attention over the years. The happens when the device says $500,000 water and wastewater sector it is a blocked chute but it really Estimated is a market in which HAWK has is not. It still means they have to hourly cost of not been a big player, but its shut the conveyor down and then downtime to issues are not much different, start it back up again. The New Australian mining.

Jack Evans emphasises. “Our Generation Gladiator Microwave products lend themselves very products have proved very nicely to measuring difficult effective in eliminating these level applications. We have a product that false trips.” He is not exaggerating: in Australia can measure even when there is foam downtime is typically costing the industry present, or dust or vapours, and in difficult $500,000 per hour. A recent installation of sewage applications like turbulence. We HAWK blocked chute switches saved Cadia have hundreds of level devices installed in Mining over $2.8 million in a single year, the City of New York for measuring water according to the client’s own figures. This is levels underground and to determine where a classic answer to a real world application the flow of all their waste water is going and challenge, he adds. Our example may be from

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Jack Evans Director of global operations

Bed level and chemical dosing control for thickeners

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Jack currently lives in Melbourne Australia with his family. Jack has been involved with the process controls industry for over 25 years and recently served as Chairman of the Measurement, Control & Automation Association.

Prior to HAWK, Jack was President, CEO of KROHNE, Inc. in Peabody, MA and National Sales Manager for Milltronics in Arlington, TX. Previous to his tenure with Milltronics, he spent seven years with Micro Motion in various positions. He holds a Bachelorâ&#x20AC;&#x2122;s Degree in Industrial Engineering Technology from Georgia Southern University in Statesboro, Georgia, United States.

Hawk Measurement Systems (HAWK)

Ship loader collision detection

“We have been lucky in getting very talented and qualified people who believe in where the company is going” send the information back to their control room so they can open and close valves and gates as they need to.”

HAWK spends an impressive 25 percent of its annual revenues on research & development, mostly targeted at new product development to solve customers’ application issues. Last year the company launched its new Sultan Sonar for flocculent (the stuff that binds together the sludge particles) interface or sludge bed-level measurement for the water and wastewater industry, where it fits an important niche. In the mining and power industries, HAWK’s ORCA industrial bed level controller is recognised for providing robust and dependable bed level measurements in punishing environments.

Sultan Sonar is built on this same proven technology. Now the research teams are developing guided wave radar technology, which gives a very precise continuous reading, is energy efficient, and can operate in difficult situations where other approaches like throughair radar. “This is an exciting growth product for us, and one which is being developed not just for flow and level applications but also for interface. One of the big problems in O&G is oil & water interface in the crude, and we are close to having a product developed to be able to measure that crude level both from the top down and from the bottom up.

Lots of things differentiate HAWK as a company. One might select the ability of all of its instrumentation to be accessed remotely from anywhere in the world via the cellular

networks. That’s of increasing importance as mining companies and others move towards total automation - led by Rio Tinto which already has remotely controlled conveyors, and even trucks. However asked what the most important differentiator is Jack Evans, with hardly a pause for thought, settles on its human capital. “We have been lucky in getting very talented and qualified people who believe in where the company is going, and if we can get the right people we can do almost anything!”.

Hawk Measurement Systems (HAWK)

+61 (0)3 9873 4750 info@hawk.com.au @HawkMeasurement www.hawk.com.au www.hawkmeasure.com

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Adr

Exploring new

Over the last twelve months Adrok has experienced sig its presence in key North American markets and

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rok

w possibilities

gnificant gains, not just in terms of turnover, but also its acceptance into important sectors of industry

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Opening of our Canadian office with Prince Edward Islandâ&#x20AC;&#x2122;s Provincial Minister, Allen Roach (left)

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Adrok

usiness since we last spoke has been good for the company,” enthuses Adrok’s Managing Director, Gordon Stove. “We have been growing steadily and in the process increased our turnover for last year compared to that achieved in 2012.

At the heart of this has been our ability to win more clients, and with this they have brought us fresh contracts and new sources of revenue. What that means is that at this time we are well on course to increase that turnover again for 2014, so things are going very nicely for us indeed.”

That last time we spoke which Stove refers to was in March of last year. It was then that we spoke at length about Adrok’s plans to expand its international presence in core markets, specifically the United States through

B

North America through the opening of a new Canadian office. Since then, Adrok Canada has provided the business with a base from which to service existing clients in the region and develop relationships with the country’s prosperous mineral exploration industry.

“Canada is unique in that it possesses all of the land attributes we can use to demonstrate the versatility of our Atomic Dielectric Resonance (ADR) technology and its capabilities,” Stove says. “There is ice, snow, dry areas, water and high mountainous areas all present within the country, and one of our key unique selling points is that our technology is very portable. This means that we can take our technology and survey crews into areas that other large geophysics techniques, large seismic trucks for example,

“We have been growing steadily and in the process increased our turnover for last year compared to that achieved in 2012” the opening of a new office in Houston, Texas.

This office has been operation for well over a year now and is today helping to facilitate some of Adrok’s strongest areas of growth.

“In truth we planned for a relatively slow start when it came to our activities in the US, what with it being traditionally a more conservative market,” Stove explains. “With that being said we still challenged ourselves to obtain a certain number of clients and with the two new clients we secured at the turn of the year we have already reached our targets with only a quarter of 2014 behind us. Needless to say therefore that we are quite happy with the progress we have made in this important market to date.”

In July of last year the company also made the decision to increase its presence in

won’t necessarily want or be able to go. As a company we pride ourselves on our ability to be very nimble on the ground, as it were, and that makes Canada an ideal playground for us to grow into.”

Adrok’s bases in Canada and Houston also present the company with the perfect springboard into other key regions of North America. Its Canadian office will allow the business to test the waters of markets such as Atlantic Canada, Alberta, Colorado and California, while its Houston base will allow it to target the Southern US and Central America in the months to come.

By offering a faster, cheaper and greener alternative to traditional seismic exploration methods, Adrok has been able to draw together a portfolio of clients including those specialising

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Gordon Stove Managing Director Gordon has over 10 years’ experience in developing and applying geophysical and remote sensing diagnostic technologies. He is co-founder and shareholder of Adrok Ltd and has helped in the development of Adrok’s intellectual property portfolio. Since Adrok’s inception, Gordon has managed Adrok’s technology developments and managed its global services business. Gordon is currently a member of the Energy Institute, Petroleum Exploration Society of Great Britain, European Association of Geoscientists and Engineers, Society of Exploration Geophysicists, American Association of Petroleum Engineering, Society of Petroleum Engineers, the Scottish Oil Club, Institute of Directors and the Caledonian Club. Gordon supports young entrepreneurs as a Business Mentor for Business Mentoring Scotland, as well as for the Prince’s Trust Youth Business Scotland. Gordon holds a BSc (Hons) in Geography from the University of Edinburgh and is a PRINCE2 Registered Practitioner.

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in geophysical exploration and research. Indeed, the company’s record for winning contracts and projects in the mining sector has continued to gather pace, however a particular area in which it has been earning more business as of late is the oil and gas sector.

“Traditionally the oil and gas sector has been very slow to adopt new methodologies or technologies, with the average timeline in this sphere being anything up to 24 years,” Stove highlights. “While we have been around for 15 years, giving us a certain degree of legitimacy, the simple fact is that we are being approached for work because we have a proven history of saving our clients money.”

What the company is doing is providing a service to its oil and gas clients before

Adrok

Field crew scanning for oil in Oklahoma

they embark on drilling programmes and Adrok’s technology is being used to guide said clients to the best places to drill for success. Additionally it is helping to reduce the number of drill holes required, thus increasing clients success rates.

“With our success to date in the oil and gas sector we have begun to turn our attention towards also getting involved in projects of our own making, almost becoming something of a pseudo oil company ourselves,” Stove reveals. “At present we are working to pick up such projects and are embarking on negotiations with several companies in the US about coming together to operate joint undertakings. It means that our business focus will increasingly turn to not just

providing expert services to certain clients, but also towards taking an active interest in what we find in the ground.”

The oil and gas sector also provides the base for a field of expertise that Adrok and Stove are very excited to progress into. “I believe that a real breakthrough for the company in the near future will come from delivering advanced monitoring solutions for existing oilfields,” he says. “Within the vast majority of oil companies one will find an advanced oil recovery programme and we want to be a part of that. By installing a permanent installation in the ground, complete with our sensors and scanners, we will be able to monitor levels of oil and water in the ground, as well as steam injection, water injection and

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Field crew scanning on ice in Canada (on Atlantic Ocean)

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Adrok

“I believe that a real breakthrough for the company in the near future will come from delivering advanced monitoring solutions for existing oilfields” CO2 injection, which are all techniques for enhancing oil recovery. Being able to provide monitoring and surveillance services during the production phase is something we are very interested in capitalising on going forward.”

In addition to increasing its turnover last year Adrok also doubled its workforce to 25 people in 2013 and it expects both these facets of the business to continue along the same upward trajectory this year.

“Other immediate plans for ourselves include growing our bases in North America, while longer term we can work with the view of perhaps setting up a permanent presence in Australia and perhaps China, which are both markets we see great long term potential in,” Stove concludes. “In the meantime we will continue to provide our services to both existing and new clients, while increasingly utilising our technologies to identify projects of which we could ultimately become part or full owners.”

Adrok

+44(0) 131 555 6662 info@adrokgroup.com @AdrokLtd www.adrokgroup.com

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Pra

Aggregatin

Praxis is a young company on a fast track: already it has grown through excellence in the way it mana 36

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ng service

y known as a reliable partner for crushing services, ages its assets to deliver services to major customers BE Mining [ Issue 18 ]

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raxis Earth Works (Praxis), based in Grande Prairie in northern Alberta, is a new company, led by its General Manager Ryan Martin since October 2010 – yet in terms of experience it lacks nothing when it comes to rock crushing, its core competency. The company started out operating a single crusher, making aggregate for a mixture of private clients, government departments and municipalities within a reachable radius of Grande Prairie. “We were working for people who had gravel pits or quarries and needed certain grades for road building or mining purposes,” explains Controller Ryan Gosse.

That work got the company off the ground and established it for the first 18 months of its existence. Then came an important breakthrough when Praxis landed a contract with Walter Energy (Walter), which, readers of this magazine will recall, has been growing its business effectively at its three mines, Wolverine, Willow Creek and Brule in northeastern British Columbia. The BC border is less than 100 miles from GP, and it made every sense to secure this important client.

But Walter is a big American corporation and getting a job from such a client is different from establishing a partnership. Contractors have to deliver! Praxis in the event delivered the value that Walter expects. As Gosse puts it: “Walter Energy has really been a big part of our growth, making up a significant portion of our business.”

P

“Walter Energy has really been a big part of our growth, making up a significant portion of our business”

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Crushing unit on site

Praxis

“We have transformed from a pure crushing company to a joint crushing and transportation operation”

The wider world might not have registered the emergence of Praxis: so far it has managed to grow on the basis of repeat work or word of mouth referral from satisfied customers. It has not needed to advertise or chase work.

For a mining operation like Wolverine, Praxis delivers two types of end product, a larger aggregate around two inches minus for use in blasting operations and a finer gravel, up to maybe half an inch, for laying down on the mine roads. The client has no lack of material, as they are cutting large amounts of overburden. The contractor’s job is simply to crush it to the size specified and load it onto the trucks. Simply? Anybody involved in this work will perhaps query the use of that word as we shall see, but it describes the scope of Praxis’s involvement.

If Praxis has a unique selling point, other than the reliability with which it does its job, it is that it works throughout the year. Northern Alberta is not an easy place to work, especially in the winter. “December to March is definitely tough!” Gosse admits. “Minus 30 or 40 degrees is not uncommon where we are.” That is hard on equipment – in fact no equipment is really designed for those conditions so it takes a lot of looking after. “Production slows in the winter, so does our profit but we look on it as better than shutting down and losing our experienced staff. If we shut down in the winter like a lot of companies do we might not get our core staff back come spring.”

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“It is a big pull when we are advertising vacancies to be able to tell people that they can work year round” Year-round working makes sense from both the economic and the HR point of view, he continues. “It is a big pull when we are advertising vacancies to be able to tell people that they can work year round – especially in an area where the O&G industry is a large employer. Those companies usually shut down for three months in the spring melt season

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and that is how we compete with them for the best available labour.”

So there are seasonal highs and lows but Praxis crushes 12 months of the year. Walter Energy normally has a spring crush program and a winter one. “We are just finishing up the winter crush program. In between, we squeeze in municipal jobs and similar civil

Praxis

work.” The filler work is always there to keep the company’s capital assets in productive use and the workforce in gainful employment.

So as soon as the equipment deployed at Wolverine was dismantled it was shifted on Praxis’s own low-bed trailers to another job for another client.

It was in late 2012 that Praxis decided to do its own transportation. Prior to this, equipment movement was contracted out, but bringing that in house made sense for the crushing operations and allowed the company to consider diversification. “We bought a couple of transport tucks and now we transport all our own equipment ourselves

including our crushing plant and the support equipment we use like excavators and loaders.

And with that equipment we have also started to do contract trucking when we don’t need it ourselves – so we have transformed from a pure crushing company to a joint crushing and transportation operation.” All of the crushing equipment, he explains, is capable of being put on a low-bed or is mounted on its own axles. At the end of a job it is cleaned off, dismantled, loaded on a trailer and relocated.

The fleet is still only two trucks strong but expansion is in the air. Praxis has just landed a big contract which involves aggregate crushing but then stockpiling it at a different

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site. Hauling the gravel has not been part of the deal to date. The plan for the coming year to 18 months is to grow the asset base to three mobile crushing plants and establish a transportation company that combines Praxis’s own trucking requirements with contract low-bedding, moving other people’s heavy equipment, and gravel hauling. This will simply involve obtaining alternative trailers.

That will enable the company to expand into civil construction work, road building and forestry work available in Alberta and beyond.

Of Praxis’s 30 or so employees it is a remarkable fact that only five are native to

the Grand Prairie area. Most come in for their three weeks ‘on’ and return to their home town for their week ‘off’. This is typical for this town which, is the largest support centre north of Edmonton, the provincial capital.

It has, Gosse reveals, a resident population of 55,000 but a transient population of five times that many, mainly working in the O&G and mining sectors, which accounts for its huge number of hotels.

Praxis’s employees have to have experience of handling heavy equipment, though only the team supervisors need to have prior crushing experience. It is skilled work, with a

“There is a lot of work available – the limiting factor for us is the amount of equipment we have and the number of staff”

Crushing unit on site

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Praxis

Equipment on the move

lead operator on a control tower overseeing a team of up to four and seeing that the feed matches the machines’ capacity. They work 12 hour shifts, he explains. “At the beginning of the shift they do their pre-equipment checks and make sure everything is up and running and nothing needs to be fixed. After safety meetings they crush for nine or ten hours, and in the last hour or two they do maintenance like oil changes, belt changes, even bearing changes, ready for the next shift to come on.”

Major maintenance and overhaul is carried out at the workshop in Grande Prairie, which has a fully equipped service truck in case it needs to go out to the site.

It may be harder to maintain something like 100 percent annual expansion beyond the first three years, but Praxis remains hungry for new customers and opportunities, expecting to maintain its 50 percent yearon-year revenue growth record through to 2015 and beyond. With three crushing plants

and a growing tucking operation its reach will spread – ideally it will keep its Grande Prairie service centre for northern Alberta and north-eastern British Columbia but will add a presence in the south of the province near Calgary or Edmonton. “There is a lot of work available – the limiting factor for us is the amount of equipment we have and the number of staff,” concluded Ryan Gosse. “We are a growing business in a growing market.”

But ever prudent, he stresses that the market will determine the speed of growth, and the company will never overstretch itself by leveraging beyond its ability to fund expansion from its cash revenues.

Praxis

780-882-8741 rgosse@praxisearthworksltd.com

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Inspired innovation No-SpillTM Systems No-Spill™ Systems’ commitment is to provide fluid draining solutions that provide high quality and eco-friendly results, and measures its success on its ability to exceed its customers’ expectations

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t was a German by the name of Helmut Muller who will always be credited with development of the first environmentally friendly drain plug, patenting the first version of the “pop-up” style, spring-loaded drain plug in 1977. It was then in the mid-1980s that a Dutchman by the name of Poul van Santen would go on to invent an improved version of the aforementioned product.

Only a few years after this Lorne and Donna Hasinoff, present day owners of No-Spill™ Systems, were first introduced to the drain plug product. So impressed were they by the product that they subsequently committed their efforts and energy to opening up the North American market for drain plugs, selling them under the name Ettco.

Changing its name to Femco Environmental in 1996, the company would go on to champion the development of the Compact and Speed Click™ version of the Dutch drain plug. It was in the year 2000 that the company No-Spill™ Systems was incorporated in the United States. In the years since, No-Spill™ Systems has worked extensively with its customers and utilising its own vast product knowledge is today making its own No-Spill™ branded drain plugs and has improved on every tangible aspect of the product “This No-Spill™ drain plug is now produced using US and Canadian sourced labour and materials and is raising the bar for drain plug quality once again,” enthuses Carrie Hasinoff, Director of Marketing. “This No-Spill™ product is customised for the North American market based on suggestions and years of input from our valued end user customers and dealer network, now over 4,000 strong.”

As Hasinoff goes on to state, the need for environmentally sustainable fluid transferring technology is growing stronger by the day. “No-Spill™ Systems is moving

I

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American made drain plugs ready for shipment

No-SpillTM Systems

forward with this trend by promoting our No-Spill™ System in many markets in multiple continents. Our latest emerging markets are in South America, and Central America. We continue to adjust and tweak our product to provide specialised solutions for our customers wherever they may be. We’ve completely re-invented the same drain plug with better materials, improved thread pitch accuracy, and a truly American product.”

No-Spill™ Systems is committed to providing fluid draining solutions that provide high quality and eco-friendly results, with excellent value for its esteemed customers. “Our success is measured by our belief in No-Spill™ Systems’ ability to meet or exceed expectations of value, quality, and service,” explains Sales Manager, Richard Warren. “We truly believe that our product is the best around and that our customers are getting a better, cleaner and safer way to do fluid changing.”

No-Spill™ Systems emphasises that its product is not simply a “fitting”, rather it is a living commodity that changes year to year with every change and movement in the market. In the past two years alone the company has gone about the process of modifying all of its NPT plugs in order to reflect what it calls, “a true North American thread pitch”.

With a combined experience of more than 88 years in the industry, No-Spill™ Systems is the longest running drain plug company in the world, and from day one its customers have been recognised as being the core reason behind the success of the business.

“Our customers are the first to suggest improvements and we are always backing them up and looking for ways to implement their needs into our product,” Hasinoff explains. “For example, there was an increased demand for the body of our Speed Click™ Clicker to be manufactured entirely in brass. We responded and in addition to improving the brass body of the product,

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No-Spillâ&#x201E;˘ production adheres to the highest quality standards

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No-SpillTM Systems

“We truly believe that our product is the best around and that our customers are getting a better, cleaner and safer way to do fluid changing”

have improved the way in which it connects to its mating piece. We have also responded to a resounding customer request for quicker flow of fluids through the product.

We collected data from our customers, worked tirelessly with engineers and in the end now have the only Speed Click™ Clicker with a three-quarter inch diameter flow in the industry.”

The company has also benefited hugely from the development of a business model that stands strong in the face of economic difficulty. “In the economic fall of 2008, we took a risky counter intuitive business approach and doubled our sales team, to reflect the addition effort that would be required to support growing sales volumes in a depressed market,” Hasinoff reveals.

“We also created a Drain Plug Specialist position, whose primary responsibility is researching and matching up new drain plugs with their No-Spill™ match. This was another example of the amount of time, resources, and talent we have invested over the years into bringing the No-Spill™ drain plug into fruition and it’s been well worth it. Our customers appreciate the lower price and they appreciate that we are keeping jobs in our home countries where they matter most to us.”

“Every time we talk to our customers the message is always the same and that is that they love our products,” Warren says. “Some of these have been with us over 20 years and they just love our products because they save so much time, money and effort.

Our products ensure a quick and easy way

of carrying out fluid changes, meaning that a vital piece of our customer’s equipment that is brought in for a fluid change or preventative maintenance is in our premises for the least amount of time and sent back out into the field as quickly as possible.”

For the rest of 2014, the company’s plans are to continue pushing for greater sales in the South American mining and oil and gas industries where it continues to see huge demand for onsite maintenance and its products. Further ahead, into 2015, it foresees future growth in all of its core markets as the global economy shifts upwards. In line with this projected growth, No-Spill™ Systems has devised a strategy to further infiltrate the US market in particular with special attention to addressing the needs its competitors simply cannot complete with.

“We recognise that our customers can spend their maintenance budget in many ways and we are thankful every time they choose us,” Hasinoff concludes. “In order to continue to meet their evolving needs we will strive to continuously innovate our product.

Recently we came out with a 3/4 inch drain tool and it is product innovations like that that we are looking every single day to do, to innovate and meet new challenges.”

No-SpillTM Systems

1-866-466-7745 info@nospillsystems.com www.nospillsystems.com

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PPC

Sustainabili for future d

Operating in some of Africaâ&#x20AC;&#x2122;s most important d becoming a leading emerging-market busines 50

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C Ltd

ity - the key development

developing nations, PPC Ltd is well on its way to ss, and a responsible, sustainable one at that BE Mining [ Issue 18 ]

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ncreased concern and focus on global warming has no doubt made it necessary for countries, industries and businesses to look for growth and development opportunities in a more sustainable manner. One particular example would be the global cement industry which has historically suffered from having a high carbon footprint due to the energy requirements and chemical process involved in cement manufacturing technology.

PPC Ltd, a pioneer in the southern African cement industry, remains committed to the integration of environmental and sustainability issues into its business strategy. The cement supplier recognises that the impacts of climate change, management of water resources and energy security are among the greatest challenges facing society today.

“PPC cannot ignore the need for sustainable development as we believe we have a responsibility towards future generations. We aim to minimise the impact of our environmental footprint and create more positive outcomes in the long term,” explains Tshilidzi Dlamini, Group Sustainability and Environmental Manager for PPC. “The strategic steps we have taken in reducing our environmental footprint, as an integral part of our sustainable development measures, will allow PPC to achieve its long term goals and targets.”

Sustainability has been a big part of PPC’s

I

“PPC cannot ignore the need for sustainable development as we believe we have a responsibility towards future generations”

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PPC Ltd

“When it comes to water, while we are not a major consumer, we can’t ignore its importance, given the scarcity of water in this country” agenda for many years, and all of their cement plants were ISO 14001 certified in 2001. The company also has a stringent environmental policy, which received a stamp of approval by the then CEO, in 1997, and is reviewed on an annual basis.

In October 2011 PPC set out to improve electrical efficiency by ten percent, thermal efficiency by five percent and ultimately reducing its specific carbon footprint by five percent by 2017. Coupled with this, PPC aims to source ten percent of its electrical energy from renewable and/or alternative energy sources. PPC has also carried out significant work on its procurement policies, which now encourage the use of sustainable material and resources. The business is engaging its top six suppliers by spend to assess their sustainability in 2014 and the business aims to expand this further to other suppliers.

“When it comes to water, while we are not a major consumer, we can’t ignore its importance, given the scarcity of water in this country,” Dlamini continues. “As such we are working on improving water monitoring systems to understand the areas of potential saving while also continuing to make huge savings through various upgrades.”

PPC is of the opinion that changing legislation is one of the biggest stumbling blocks for corporates to increase its drive for sustainable development. “The regulatory

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Tshilidzi Dlamini, Group Sustainability and Environmental Manager

process is prohibitive due to the increasing number of licences that one needs to hold to operate business and the processes associated with acquiring this licences. This almost hinders a company’s ability to innovate as its focus turns to licensing,” Dlamini states.

The relationship between environmental requirements and production demands has also, at times, made it challenging to address environmental requirements such as upgrading plants to meet certain standards.

Over the last couple of years, PPC has received the ISO 14001 certification for all of its cement operations in South Africa. “These systems assisted the business in being able to manage its legal requirements, while also being able to identify key aspects and impacts associated with our operation,” Dlamini says.

“As this requires the commitment from PPC’s top management, it created awareness and also availability of resources to address environmental impacts.”

Another major achievement for PPC comes in the form of a four star rating for its new headquarters by The Green Building Council of South Africa (GBCSA), an independent, nonprofit company formed in 2007 to lead the greening of South Africa’s built environment.

Located in the middle of the hustle and bustle of the Northern Johannesburg business centre, Eastgate 20 on Katherine Street in Sandton, South Africa now houses one of the largest cement suppliers in southern Africa. The new building is strategically designed to efficiently reduce energy and water. The Green Star

“The regulatory process is prohibitive due to the increasing number of licences that one needs... this almost hinders a company’s ability to innovate as its focus turns to licensing”

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PPC Ltd

rating system from the GBCSA controlled so that only as much Did you know? cooling is provided as needed, was designed to provide the and the motors do not just stop commercial property industry and start.” with an objective measurement 2001 Eastgate 20 is also expected for green buildings and to create The year that all to make a significant reduction and reward environmental of PPC’s cement in the usage of potable water leadership in the property plants became ISO through the installation of industry. A four-star rating 14001 certified water efficient fittings for taps, recognises a building for its urinals and toilets. Furthermore, “Best Practices”.

40% Eastgate 20 has also increased To consume less energy, The amount of the quality of the water in the Eastgate 20 has been designed revenue PPC hopes adjacent environments. PPC to utilise efficient lighting which to generate from has a storm water treatment is only activated when an area outside of southern site, adjacent to Eastgate 20, is occupied. Further to this, the Africa by 2017 where it treats all the water design has enabled the building from its premises and that of the to take advantage of natural neighbouring sites to ensure that light, reducing the building’s it is clean before it flows into the river. electricity demands during office hours.

“Normally during a storm event, rainwater “We have also made considerable progress runs off hard surfaces into storm water drains through our new air conditioning system,” and is directed into the nearest river to avert Dlamini states. “It uses inverter technology for flooding,” Dlamini highlights. “In built up the compressors, meaning that the speed is

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areas, the abnormally amplified increase in water flow during storm events disrupts the natural balance of the ecosystem and the river’s ability to function as part of a healthy ecosystem.”

PPC has further boosted its green credentials by investing in the wind energy sector. Construction of the Grassridge Wind Energy Facility in Nelson Mandela Bay officially began with project representatives from the Department of Energy (DoE), InnoWind (Pty) Ltd, PPC Ltd and community representatives from Motherwell turning the first soil of the R 1.2 billion wind farm.

The Grassridge wind farm forms part of the DoE’s Renewable Energy Independent Power Producer Procurement Programme and is being established at PPC’s Grassridge Quarry. It is one of the first renewable energy projects to be developed within an operating quarry in South Africa.

InnoWind, a local wind energy developer owned by EDF Energies Nouvelles has developed the project. The wind farm is owned

by Grassridge Wind Power, a project company which comprises InnoWind, the Industrial Development Corporation and the Grassridge Winds of Change Community Trust. This

“PPC is committed to becoming a more sustainable company. This project is the first step in procuring power from renewable sources”

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PPC Ltd

facility will consist of 20 Vestas V-112 3MW wind turbines, with an installed capacity of 61.5 MW, delivering electricity equivalent to the annual consumption of approximately 40,000 households. The development is the first phase of possible future wind farm expansions in its vicinity.

“We have come a long way in bringing this project to fruition, and are all very excited to reach this milestone that is the start the construction of InnoWind’s first wind farm in South Africa,” said Kevin Minkoff, Project Manager at InnoWind.

According to Egmont Ottermann, Group Energy Manager at PPC Ltd, the wind farm forms part of the cement company’s longterm rehabilitation plans for the mine. “PPC is committed to becoming a more sustainable company. This project is the first step in procuring power from renewable sources.”

Indeed, PPC and InnoWind are today in

the midst of discussions for a second phase, 24 MW wind farm under a bilateral power purchase agreement. When commissioned, this farm will supply ten percent of PPC’s electrical energy requirements in South Africa.

In a report by the European Cement Association, a safe environment is essential for protecting people from changing weather conditions, such as long periods of drought and a significant level of rainfall. “Concrete can be used to provide comprehensive fire and flood protection including protection of people, animals, goods, property and the environment. It also plays a key role in guaranteeing a safe, secure supply of drinking water and power,” the report said.

The report indicates that the high thermal mass of concrete enhanced thermal comfort by minimising or avoiding overheating during heat waves especially when combined with natural ventilation and appropriate building

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“Buildings are getting smarter by utilising wind and minimising water usage. Buildings are also much more adaptable to harsh weather conditions or events” architecture. This also reduces the need for air conditioning, thereby reducing carbon dioxide emissions from energy consumption.

“Cement is incredibly important in addressing the issues posed by climate change,” Dlamini enthuses. “Buildings are getting smarter by utilising wind and

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minimising water usage. Buildings are also much more adaptable to harsh weather conditions or events. We encourage all of our clients to keep that in mind in the design process of their new structures and urge them all to apply sustainable measures during the construction process.”

PPC Ltd

Apart from their operations in their historic territories in southern Africa, the cement supplier has undertaken an African expansion strategy which aims to see PPC generate 40 percent of its revenue from outside of southern Africa by 2017.

To achieve this, PPC has been increasing its footprint in Africa. It increased its stake to 30 percent in Ethiopian company Habesha Cement with construction of a 1.4mtpa plant due to start this year. It also acquired a 51 percent stake in CIMERWA of Rwanda, with construction of a 600,000tpa plant currently under way. Meanwhile, the construction of its 1.0mtpa plant in Democratic Republic of Congo is expected to start this year and PPC is also

currently concluding a feasibility study for the construction of a 700,000tpa milling plant to service northern Zimbabwe and Mozambique.

PPC is determined to align its sustainability strategies to all of its new operations on the African continent and in committed to making sure that all its operations adhere to international best practices.

PPC Ltd

+27 (0)11 386 9000 contactus@ppc.co.za www.ppc.co.za

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African M

A year to r

Head of Corporate Development and Investor progress made by African Minerals during 2013

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Minerals

remember

Relations, Mike Jones, discusses the incredible 3 and why 2014 is shaping up to be even better

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Laying the tracks for the new locomotives

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African Minerals

o say that 2013 was a good year for African Minerals is, in truth, something of a major understatement. While the company itself may be more modest about such things the reality is that this is the company that last year was responsible for completing Africa’s fastest major mine development. The mine in question is the Tonkolili iron ore mine in Sierra Leone, and the work of the company in 2013 saw this world class asset commence with the ramp up to 20Mtpa across its fully integrated, exclusive use 200 kilometre mine, rail, port and marine infrastructure network.

Active in Sierra Leone since 1996, African Minerals shifted from its initial search for alluvial diamonds to iron ore following the discovery of the Tonkolili deposit. Tonkolili

T

towards African Minerals establishing itself as the largest contributor towards Sierra Leone’s GDP. “Sierra Leone has been heralded as being the country with the second fastest growing economy in the world in 2013, and as the biggest contributor towards GDP we have become an important feature in the country’s emergent industrial landscape,” Jones continues. “Likewise, with its stable environment, clear mining legislation, our strong relationship with the government and with our resource set where it is, the country is equally important to us. That creates a mutual respect and a joint purpose, driving a healthy symbiotic relationship between both parties.”

As 2013’s results show, the business model that African Minerals has established for itself, one that encapsulates the ethos of

“Sierra Leone has been heralded as being the country with the second fastest growing economy in the world in 2013” today has a JORC compliant ore resource of 12.8 billion tonnes, which extends over a combined strike length of 30 kilometres, and includes a substantial Direct Shipping Ore and Saprolite mineral resource overlying one of the world’s largest magnetite ore bodies.

“The last 12-18 months has very much been characterised by the completion of construction of Phase I at Tonkolili and its subsequent de-risking,” states Mike Jones, Head of Corporate Development and Investor Relations. “We have also spent the last year making the operating parameters of the project more consistent in order to maintain the desired 20 Mtpa run rate.”

In total, 2013 saw the company produce approximately 13.1 Mt of saleable iron ore and export 12.1 Mt. These figures contributed

“don’t put off until tomorrow what you can do today” has proven hugely successful. “In order to get a perspective on how we put this model into practice you need only to look at the rapid development of the Tonkolili deposit throughout our time operating here,” Jones explains. “Initially we set up under the pretence of this being an eight million tonne per year partial road haulage operation. Over a relatively short space of time, during which we were developing the asset and securing mining and infrastructure licences, the whole approach evolved to make it a ten million tonnes on rail operation, then twelve, 15 and ultimately 20 million tonnes per year.”

As Jones goes on to highlight, such a large change in scope during the early stages of construction would have likely proven to be

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African Minerals

New locomotives arriving in Sierra Leone

“We have also spent the last year making the operating parameters of the project more consistent in order to maintain the desired 20 Mtpa run rate” impossible had the company gone the natural route of getting a formal reserve developed, dipping into feasibility studies, securing external project financing and so forth. “By applying a large degree of flexibility when it comes to our financial arrangements and capital decision making, we have been able to significantly enhance and accelerate the completion of the expanded phase I project during its construction.”

Impressive as they are, African Minerals’ efforts have not solely been designed to

benefit the company and its stakeholders alone. Rather it has always been its desire to ensure that everybody is a net winner from its activities, striving to create a better quality of life for the communities in and around where it operates, one that is sustainable long after the mine has ceased operating.

“One of the first benefits people tend to link to a successful operation like ours is direct employment, however it goes much further than that,” Jones says. “One can only employ a certain amount of people

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Beltship Management Limited

The Self-unloading & Transhipment Specialists BML is a joint venture Company between Globe Shipmanagement Ltd and Gypsum Transportation Limited (GTL) and has been involved in the self-unloading and transhipment market for over twenty years. However with our partners we have roots stretching back to the late 1800’s with the first Gypsum Queen loading Gypsum in Canada in the 1890’s.

In 1947 GTL were the first Company to build ocean going self-discharging bulk carriers and as such as a group there is a vast knowledge of the industry, the self-unloading concept and the cargoes carried.

Beltship in Sierra Leone BML was contacted by African Minerals Limited (AML) in 2010.

In 2010 the project was in its infancy and AML required a transshipment solution to move 8 million tons per annum (MTPA) of iron ore from the Port of Pepel, inland from Freetown, to an offshore transshipment location where the iron ore was to be loaded onto Capesize ocean going vessels (OGV).

The loading port has a draft restriction of 9.5 meters, the channel is narrow with tight bends, and currents in the channel can run in excess of 4 knots. This challenging environment duplicated, almost completely, the operating

challenges that our vessels were designed to overcome at the loading ports in Nova Scotia, Canada. Additionally the advanced maneuverability of the vessels meant that they were ideal for the challenges of ship to ship operations, and with the flexibility provided by the vessels telescopic boom, efficient loading of an OGV with a minimum of transhipment vessel movements would be possible.

AML export cargo consists of three grades of DSO, lumps, fines and AL32. The AL32 is a product which contains a certain amount of clay which can make handling difficult, however the vessels hopper shaped holds with their high slope angle combined with the MHF discharge system (negating hog backs) and oversized conveyors and transfer points was designed to handle “sticky” cargos.

These technical advantages, inherent in the design of the vessels, together with an early start date and attractive freight rates, secured the Contract for BML in the face of stiff opposition from other specialist transhipment Companies and BML kicked off operations in October 2011.

Since startup the transhipment operation has been very successful and, after a short ramp up period, the vessels have consistently over performed relative to the requirements of the

“Since startup the transhipment operation has been very successful and, after a short ramp up period, the vessels have consistently over performed relative to the requirements of the contract”

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[ Issue 18 ] BE Mining

contract. This success resulted in a contract amendment to increase the transhipment exports to 20 MTPA for which BML brought into the project a third vessel and embarked on a major upgrade of the two existing vessels to increase design discharge capacity.

This upgrade involved back fitting frequency convertor drives to all conveyors together with larger motors allowing faster belts speeds, increased discharge rates but allowing a decrease in per m2 loading of the belts. This has afforded better performance whilst reducing the mechanical stresses on the system.

An average rate of 2800 tons per hour is required to meet the 20MTPA contract requirements whilst the actual average is now nudging 3400 tons per hour.

BML is now operating 4 vessels in Sierra Leone, has a local office staffed with 55 employees of which 50 are Sierra Leones.

BML has a commitment to Sierra Leone and has undertaken a cadetship scheme to provide

education and employment opportunities for the youth of the Country. Promising young men and women are sponsored and supported by BML to attend the Regional Maritime University in Ghana and regularly join the BML fleet for practical training and experience.

Currently BML is loading 10 OGVâ&#x20AC;&#x2122;s a month which is an approximate 1.74 million tons per month of iron ore thereby helping AML to reach its targets. To date BML have loaded 123 Cape Size vessels and completed 615 ship-to-ship operations since start up thereby making BML one of the worldâ&#x20AC;&#x2122;s largest transhippers by volume as well as one of the most experienced ship to ship operators worldwide.

+377 97 97 80 90 info@beltship.com www.beltship.com

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Wet Processing Plant during night shift

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[ Issue 18 ] BE Mining

African Minerals

“By the second half of this year we expect to commence with the building of our first Saprolite haematite concentrators, which will go into production by 2016”

obviously, so we look closely at how our presence in the region can positively impact upon people up and down our footprint. In terms of indirect employment, increased activity in the area creates opportunities for the service sector and we also try to assist where we can in the drive in demand for goods and speciality services, including livestock, food and vegetables, carpentry, brick making and clothiers.”

The development of people within the community in order to give them a better chance in life is a driving force behind a number of African Minerals’ CSR efforts, one of which is the refurbishment and financing of the Magbaruka Technical College.

“One of the first things we noticed when we began operating in Sierra Leone was the fact that, as a result of the devastating Civil War that latest from 1992 to 2002, there was a significant dearth of men and women in the 20-30 year old age group, the group that would typically include your semiskilled artisans and tradespeople,” Jones highlights. “Our response to this is to utilise the college in order to provide national, vocational training in various semi-skilled and skilled trades. In completing this training these men and women will become certified both nationally and regionally, and while of course we would love it if they all one day worked for us, the most important thing is that they leave the college as a mobile asset capable of earning a living either within Sierra Leona or the wider region.”

At the time of writing figures released by the company shows the first quarter of

2014 coming along encouragingly, with the fully integrated mine, plant, rail, port and marine operation contributing towards the production of 5.3 Mt of saleable product and the export of 4.6 Mt in the quarter, making the company the largest iron ore exporter in West Africa.

“Moving forward there are two key elements that we are focusing on,” Jones concludes. “Operationally we want to stabilise our production rate at 20 Mtpa. Doing so will subsequently bring down our cash costs and thus increase our profit margins. From there we can turn our attention to locking the longer term future of the asset in place. The existing Direct Shipping Ore resource, which represents just one percent of our ore body, is likely to become depleted around the end of this decade, and we will need to have already moved into the higher margin Saprolite phase of the ore body, which represents nine percent of our ore body. By the second half of this year we expect to commence with the building of our first Saprolite haematite concentrators, which will go into production by 2016. This will lock in place the next phase of life for the Tonkolili mine, a multi-generational asset that we believe will be here for many years and decades to come.”

African Minerals

020 3435 7600 info@african-minerals.com www.african-minerals.com

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Alacer

Sulphide and oxide in

Alacer operates the world-class Çöpler gold mine that pr a record figure achieved with exemplary safety performa importance for Turkey’s g 70

[ Issue 18 ] BE Mining

r Gold

n golden harmony

roduced more than 271,000 ounces of gold during 2013, ance: this is the companyâ&#x20AC;&#x2122;s primary asset and of strategic growing mining industry BE Mining [ Issue 18 ]

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The first gold was poured at Ă&#x2021;Ăśpler in December 2010

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Alacer Gold

t puts the current gold market into perspective when one looks back just a couple of years. In 2012 when we last looked at Alacer Gold’s Çöpler gold mine gold prices stood at just over $1,000 an ounce. Since then they have risen of course to as high as $1,800 in mid-2011 before setting out on a steady decline. Nevertheless at the time of writing, at a level of £1,246 an ounce they are still above what was then considered a very positive level for the TSX listed company, which in 2014 expects to produce at Çöpler 160,000 to 180,000 ounces of gold at all-in cash costs of between $730 and $780 per ounce.

Alacer owns an 80 percent interest in the mine, with the remaining 20 percent held by its minority Turkish partner Lidya Madencilik

I

$322 per ounce. Mining of the Manganese Pit commenced during 2010, and mining of the Marble and Main Pits commenced during 2012.

The Manganese Pit has provided the greater part of ore thus far, however, the balance is planned to shift to the Main Pit from the second half of 2014. Processing of oxide ore started in 2011 with a three-stage crushing circuit nominally rated at 15,500 tonnes per day (tpd). Toward the end of last year a parallel clay handling circuit was commissioned to enable processing of ore with a higher clay content. The Çöpler plant now has a capacity of 17,000 tpd. The crushed ore is then delivered to the heap-leach pad.

To extract the gold from the ore, a lowconcentration cyanide solution is applied to the agglomerated ore on the leach pad using

“Following necessary changes Alacer is now well placed to execute our new strategy in a cost-effective manner”

San. Ve Tic, AŞ (Lidya Mining). Lidya Mining is owned by Çalık Holding AŞ, a multi-billion dollar Turkish conglomerate that is enthusiastic about Turkey’s mineral potential. Alacer first acquired an interest in Çöpler more than twelve years ago, and by 2004 it had acquired 100 per cent control of the property. At that stage, all it really owned were the rights to mine what was still virgin territory, however in 2009 it entered a strategic relationship with Lidya Mining, and construction of the mine began not long after, with the first gold being poured December 2010 and full commercial production announced a few months later. Çöpler exceeded expectations during its first year of operations. Commercial gold production came on stream earlier than planned and in total the mine produced 185,418 ounces of gold at a cash operating cost of

a low-pressure irrigation drip system. Doré bars are produced on site and transferred to third-party refineries for final recovery of gold and minor amounts of silver. Over the life of the current heap-leach project, approximately 63 percent of the gold contained in the oxide ore is expected to be recovered.

It has been a very successful low cost operation, in some contrast to the mines Alacer owned in Australia. The latter returned a poor operating performance, which coupled with the declining gold price last year convinced the directors that the best course of action would be to sell the Australian assets and focus the company’s efforts on Turkey. This was an opportunity for further restructuring and cost reduction, said CEO Rodney Antal in his review of last year’s performance. “The restructuring of our

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Alacer Gold

business has also included reductions in the management team and corporate overheads.

Following these necessary changes Alacer is now well placed to execute our new strategy in a cost-effective manner.”

He claims that better than expected oxide ore grades and a steady improvement in heap leach gold recoveries will contribute to making Çöpler one of the lowest cost gold mines in the world during 2014. There are

“I am very excited about the progress being made during 2014”

Securitas Turkey Securitas Turkey has been providing security consulatancy and private security services to Anagold Madencilik since 2008. The utmost proirity for Anagold is to ensure a process complaint with local employment and procurement policies in this project that hasn’t faced and security breach or occupational accident. With no occupational accident during the last year, sustainability of training to the security team of 46 persons is ensured by a company in Erzurum. Offering diverse solutions to each segment, Securitas takes its services further by procuring different perspectives to Occupational Health and Safety thanks to risk analyses. www.securitas.com.tr

The mine is high in the mountains

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two forms of mineralisation at Çöpler, oxide and sulphide forms, making the ore amenable to conventional open pit mining. The oxide ores are being processed in a simple crush, agglomeration and heap leach circuit. For the deeper sulphide mineralisation, Alacer is at an advanced stage of a definitive feasibility study (DFS) to evaluate the treatment of sulphide ore via a system known as whole-ore pressure oxidation (POX). It is notable, he adds, that the grade of sulphide ore mined during 2013 was significantly higher than had been predicted,

with positive gold reconciliation averaging 39 percent on a contained ounce basis. An extensive work programme is currently being undertaken, in conjunction with the DFS, to understand these positive gold reconciliations.

During 2013 Çöpler Gold Mine proved that it is truly a world class asset by producing 271,063 ounces of gold at total cash costs of just $429 per ounce from heap leaching of oxide ore. The mine has very substantial proven and probable reserves of 3.6 million ounces of contained gold and measured and

“Alacer is in an excellent position to capitalise on the transformational changes made during 2013”

271,063 ounces Gold produced in 2013

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Alacer Gold

The remote Çöpler Mine

indicated resources of 8.5 million ounces.

Located in central eastern Turkey, roughly 550 kilometres to the east of Ankara and 120 kilometres south west of the city of Erzincan, the nearest population centre is the town of ĺliç (population 3,000) which is just six kilometres from Çöpler. In 2013, the Çöpler joint venture started to fund a regional school in ĺliç. It is estimated that $2.8 million will be invested in this project by the end of 2015.

A surface gold mine is very different from an underground coal operation but there is no denying that the recent horrifying accident at the Soma mine in western Turkey has focused world attention on safety in the industry. Safety programmes include training for all employees, special training for exploration and emergency response teams, recognition for safety achievement, and a steady flow of information that keeps people focused on continuous safety

improvement. It is gratifying then to be able to record that in 2013 more than three million man-hours were worked at Çöpler without a single lost time incident (LTI) up to March this year – during a period when the mine hit record production, 28 percent better than had been predicted. “I am very excited about the progress being made during 2014 and the direction in which the company is now headed,” says Antal. “Alacer is in an excellent position to capitalise on the transformational changes made during 2013.”

Alacer Gold

+1-303-292-1299 info@alacergold.com www.alacergold.com

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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.

We aim to provide a high level of service and this means that every single job is specifically tailored to suit the customerâ&#x20AC;&#x2122;s requirements.

Our 12 robust AS-350 helicopters can handle almost any task. It is the ideal helicopter for sling

operations with our experienced and competent long-line sling pilots. Our 8 Bell 212s with their versatile and spacious cabins, are effective in mobilizing your exploration camp.

Our Dash 7s are very flexible combi/cargo aircraft that can meet all passenger and cargo requirements. With its unparalleled STOL capability, it matches the short runways all over Greenland and it is capable of landing on frozen lakes and other simple runways.

We are simply your sustainable choice in Greenland.

You just have to ask.

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

Mining

Special report

Greenland Mining & Exploration Focus

Sponsored by:

The BANK of Greenland

Greenland’s vital statistics

T

he figures speak for themselves - a country the size of Western Australia that contains as yet untold reserves of critical minerals, from uranium, gold and precious stones to iron ore, nickel and rare earths, beneath rock that is unencumbered by tree cover and rapidly (some might say too rapidly) being freed by global warming from its ice cover.

As the country prepares to enter a new era Greenlanders - all 56,000 of them - stand to become very wealthy as they start to sell these raw materials to hungry markets around the world.

Read on; it is all there in the numbers!

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

80

Precious Metals • Gold • Osmium • Palladium • Platinum • Silver • Titanium Semi-metallic • Antimony Gemstone • Diamond • Ruby

[ Greenland ] BE Special Report

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

FACT Ruby prices have risen to over $550,000 per carat set

Facts & figures

Area 2,166,086 km2 Population 56,968 Population Density 0.026/km2 (The island is the least densely populated country in the world) official language Greenlandic currency Danish Krone (DKK)

12

81%

1

Of Greenland is covered in ice

2

11

10

3 4 Key Mine sites 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

5 Nuuk

6 7

89

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No. of prospective licences (Active) Source: www.govmin.gl

25

20

15

10

5 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2007

2008

2009

2010

2011

2012

2013

2014

No. of exploration licences (granted) Source: www.govmin.gl

80 70 60 50 40 30 20 10 2000

82

2001

2002

2003

2004

2005

[ Greenland ] BE Special Report

2006

Facts & figures

Exploration drilling (metres) Source: www.govmin.gl

60,000 50,000 40,000 30,000

55,338

40,889

20,000

52,304

36,185 25,146

10,000

18,816

18,101 12,981

0

0

4,071

112

3,195

2000

2001

2002

2003

11,091

6,862

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Exploration expenses (Million DKK) Source: www.govmin.gl

800 700 600 500 400 711.3

300 471

522.3

497

518.9

200 300

100 103.4

111.8

20.8

2000

2001

2002

191

44.9

135

66.2

0 2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

BE Special Report [ Greenland ]

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Expected employment in progressing mining projects Source: www.govmin.gl Project

Geographical location

Expected application for exploitation

Expected jobs (operation)

Expected jobs (construction)

Eudialyt/Rare earth elements

Killavaat Alannguat (Kringlerne) – between Narsaq and Qaqortoq

2013

80

35-135

Ruby/Sapphire

Qeqertarsuatsiaat (Fiskenæsset)

Application received in 2013

60-80

40-50

Iron ore

Isukasia (Isua) – North of Nuuk

Application received in 2012

680-810

Peak 3,300

Zinc/Lead

Citronen Fjord – North Greenland

2013/2014

300

-

Rare earth elements /Uranium

Kuannersuit (Kvanefjeldet) – Narsaq

2013/2014

380

1,000

Anorthosit

Søndre Strømfjord close to Kangerlussuaq

2014

50

40

Strategic priorities with respect to minerals Source: www.govmin.gl

The Government of Greenland’s objective over the next five years is to grant three to five mineral exploitation licences on an environmentally and socially sustainable basis. The mining projects may include: • The Isukasia (Isua) project (London Mining, northeast of Nuuk) • The ruby project (Fiskenæsset, south of Kuannersuit) • The Killavaat Alannguat/Kringlerne project in South Greenland • The Kvanefjeldet project at Narsaq in South Greenland • The Citronen Fjord project in North Greenland • The Anorthosit project in White Mountain in West Greenland

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[ Greenland ] BE Special Report

Facts & figures

Focus of new government survey programmes Source: www.govmin.gl

The new targets have been determined based on global mineral demand. In this context, iron ore, gold and copper are the most important minerals based on market value.

As far as government survey programmes are concerned, the focus will be on high-volume metals ore/gemstones – and on special metals such as gold and uranium, i.e. the following: • • • • •

Iron ore, copper and zinc Rare earth elements Gold Uranium Gemstones

Diagram of value-based turnover of certain mineral resources Source: Raw Materials Group, Stockholm, 2012

32%

39%

Other

Iron ore

16%

13%

• • • • • • • •

Nickel Zinc Platinum Group Metals Silver Potash Phosphate Diamonds Rare Earth Metals

Copper

Gold

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[ Greenland ] BE Special Report

Arctic elements Greenland is progressing with determination tempered by prudence as it prepares to enter the world stage as a major supplier of minerals, adjusting its legislation to attract investment while keeping a firm grip on the potential environmental and social impact of mining Words by

John Oâ&#x20AC;&#x2122;Hanlon

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Greenland Mining

A

t the time of writing no active mining is taking place in Greenland since the closure of the exhausted Nalunaq gold mine in 2013.

Considering how much attention we have given in our pages to the companies that have an interest in developing the huge mineral resources of this country over the last two years, this may appear a depressing statement. Far from it. Greenland is an island the size of Western Australia and has deposits as diverse and accessible; it is no accident that Australian prospectors are among the international companies working alongside the governments of Greenland and its parent state Denmark to create an industry here, and as we shall see, that process is in an advanced stage of development.

“Greenland is entering a new era – that is no exaggeration” Meanwhile let us consider once again the advantages that this island enjoys, alongside some of the challenges. While it is true that unlike WA most of Greenland is locked under an ice sheet that is two miles thick in places, it has more than 27,000 miles of coastline. The ice-free coastal hinterland up to 200 miles inland is everywhere devoid of agriculture or tree cover other than in South Greenland where sheep farming and growing of some vegetables occur: the population of under 60,000 has traditionally depended on fishing, and of course still does. However this makes it ideal for modern aerial surveying and something of a geologist’s paradise – Greenland is a break-off from the Canadian Shield, so its geology is

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similar and predictable. It also means that the deposits are never far from the coast.

There’s not much in the way of ports, and infrastructure costs have to be factored in, but it does mean that bulk minerals can easily be enshipped for transport to the comparatively nearby markets of Europe and the Americas.

Despite the absence of producing mines, Greenland can be regarded as a potential global mineral source. The opportunity can be taken to prepare the way both to encourage investors to develop infrastructure and production and to optimise the new industry for the benefit of the country. “Greenland is entering a new era – that is no exaggeration” affirms Dr Henrik Stendal, head of the Geology department at the Ministry of Industry and Mineral Resources (MIM).

The next five years will be crucial, and the government wants to proceed without undue delay, though without undue haste either – it is determined to get things right. The strategy for activity over 2014-2018 inclusive is designed “to maintain a high level of oil/gas and mineral exploration activity, to further the chances of making commercially viable oil or gas finds and to incentivise the mineral resources industry to obtain exploration and exploitation licences.” By the end of this period, it would like to see up to five working mines up and running.

An important intermediate goal for MIM is to set up Greenland’s own national geological GeoSurvey Greenland (GSG) within the strategy period. Another is to have the Mineral Resources Act amended to allow environmental protection in the context of mineral resources activities to be separated from the general mineral resources authority under the Ministry of Environment and Nature. Development must be sustainable, says the strategy document, and must therefore take place

Siggartartulik Deposit Surface showing by True North Gems

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North American Nickel have been drilling in the Maniitsoq area for the last two years

with the greatest possible respect for our environment and nature and not least for all the people living in Greenland.

The first mine to open is likely to be the Fiskenaesset Ruby Project, located on the south-west coast, about 100 miles south of the capital Nuuk. The owner of

“Both rubies and pink sapphire have been found in abundance, and this promises to be a very viable project”

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this project, Vancouver-based True North Gems has obtained its mining permit and also its Impact Benefit Agreement (IBA; an essential permit stage agreed between the company, the government and local representatives), signed in June, and is ready to proceed later this year or early next once it has completed its financing arrangements. Both rubies and pink sapphire have been found in abundance, and this promises to be a very viable project according to Stendal.

However it is quite small in scale compared with some. “There’s a large nickel camp in the Maniitsoq area just to the north of Nuuk here. North American Nickel has been drilling there for the last two years and they have an extensive

Greenland Mining

programme.” That is true – the company says it has flown more than 4,000 miles of helicopter surveys, and last year it drilled more than 1,500 metres on the 4,983 square kilometre nickel-cobalt project.

“They are hoping to define a resource this summer, so that then they can make an application for exploitation – this is a really promising project!” he says. The Maniitsoq area has seen relatively little exploration activity given its very large size and abundance of nickel occurrences.

This deposit, it is thought, represents the remains of a gigantic, three-billionyear-old meteorite impact, and displays a similar geological formation that is found in Canada’s Sudbury Basin.

Maniitsoq revels in a climate that

“NAN’s nickel property at Maniitsoq is a really promising project”

keeps it free from ice all year round. The same is true of London Mining’s iron ore project at Isua, less than 100 miles north east of Nuuk. Its 30 year exclusive exploitation licence was awarded on 24 October 2013, and the company is currently negotiating an IBA. This is a large resource at 1.1 billion tonnes and the potential for further resources. Isua could sustain a 15 million tonnes of concentrate

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Greenland Mining

per annum operation, with 70 percent iron, for 20 years. A bankable feasibility study was completed in 2012 however the investment package of $2.3 billion has yet to be finalised. China is hungry for these minerals, and London Mining has been involved in negotiations that MIM has been carrying out with the China Development Bank – the next visit to China will take place in the autumn in connection with the yearly China Mining, says Henrik Stendal, who is keen to get the iron ore project off the ground: “Each time we meet them we move a step forward.”

As mentioned, Greenland has a very small population and the government has been very nervous about its inability to meet the personnel demands of a new industry – which in cases like London Mining’s might run to thousands. There’s no doubt that workers will have to be brought in, and their impact will be considerable. There simply aren’t enough skilled workers in Greenland to fill all the jobs the mines will create. Some see this as a benefit if the miners will live in the community, send their children to school, and spend their money with local businesses. Others fear that the influx will destroy the Greenlanders’ way of life.

The Large Scale Act as passed in 2011 and amended in autumn last year has cleared the way for mining companies to bring a large labour force into the country though, and this should help to secure confidence among investors.

There is one rather exciting new project that belongs to Hudson Resources of Vancouver. Hudson formerly developed a rare earth elements (REE) project at Sarfartoq, and it has now made progress with its Naajat (White Mountain) anorthosite (calcium feldspar) project close to Kangerlussuaq, Greenland’s international airport. This material offers the opportunity to quickly establish a

Hudson Resources are hoping to put in an exploitation licence to the Ministry later this year

mine to supply the fibreglass industry with feed material as a replacement for kaolin. It also has the potential to replace bauxite in the production of alumina and provide solutions for the very large mineral filler/extender market. According to Dr Stendal the company has recently established with potential fibreglass industry partners that the anorthosite block contains low quantities of sodium, a quality they look for. “Hudson is hoping to put in an exploitation licence to the Ministry later this year – and since the project was only started 18 months ago it has moved forward very quickly to this point.”

Down at the southern tip of the country Tanbreez Mining Greenland sees its massive eudialyte deposit

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“We are expecting Greenland Minerals & Energy Ltd, the owner of the licence, to lodge an application for exploitation of both uranium and rare earths before the end of this year – then we can start uranium mining in Greenland!”

providing uncontaminated light and heavy rare earths for hundreds of years to come. Tanbreez is not another difficult Greenlandic name but a portmanteau of the tantalum, niobium, zirconium and rare earths in the ore body. Its Australian founder Greg Barnes believes that the deposit will be a game changer for the world REE market, and he’s probably right considering its accessibility and the fact that it contains half of global resources

Tanbreez taking some lake settlement samples

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[ Greenland ] BE Special Report

outside of China, which has hitherto had a near monopoly.

Tanbreez is on a fast track to full permitting. The adjacent Kvanefjeld deposit also contains significant quantities of REEs however these are associated with uranium. Until recently Denmark and Greenland being staunchly nonnuclear would not countenance uranium mining. This ban however was lifted last year, and Stendal expects all the requisite

Greenland Mining

Greenland Minerals & Energy have been operating in Greenland since 2007

legislation to be in place by early 2016.

“We are expecting Greenland Minerals & Energy Ltd, the owner of the licence, to lodge an application for exploitation of both uranium and rare earths before the end of this year – then we can start uranium mining in Greenland!”

Finally, Dr Stendal points out that even the seasonally ice-locked north is now open for exploration and development by companies that respect the sensitivity of this Arctic environment. Another Australian company, Ironbark Zinc, is continuing to advance its Citronen project, which represents one of the world’s largest undeveloped zinc-lead resources, in excess of 13 billion pounds of contained zinc and lead metal. To date more than 67,000 metres of diamond drilling has been completed at Citronen Fjord, which is potentially a very large type of deposit.

We may have been passing through a period of depressed commodity prices on global markets, and China’s industrial growth may have slowed somewhat but these conditions will pass, and Greenland will undoubtedly be a leader in providing the minerals that will be needed as demand for increased infrastructure starts to be met and capital markets recover. It will be a busy time for MIM together with the Mineral Licensing and Safety Authority (MLSA, formerly BMP) as it coordinates all the associated licensing and permitting activity.

Learn more about Ministry of Industry and Mineral Resources (MIM) and the Mineral Licensing and Safety Authority (MLSA). www.govmin.gl

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A small bank with big Influence The BANK of Greenland According to international standards, The BANK of Greenland is a small bank. But in Greenland, the bank is unconditionally the largest bank. And if you want to operate in the Greenlandic mineral resources industry, the bank is without comparison the strongest local collaborator to help you with financing and assistance concerning day-to-day operations

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ith a total business volume of DKK 2.74 billion, The BANK of Greenland is only a small financial institution internationally. In Greenland, however, the bank is the largest bank and the only physically available full service bank. With a strong local mooring and more than 45 years of close cooperation with Greenlandic industries and public institutions, the bank takes the absolute lead as a partner for businesses in the Greenland mineral resources industry.

We know the decision-makers in Greenland. We know the people who explores. We know the people who are close to extraction. Last but not least we know all the enterprises that offer services to the mining companies. And of course our network of national and local partners benefits our customers, says Lars Gaasvig, Commercial Lending Manager at The BANK of Greenland. He continues: The BANK of Greenland is a modern bank with a European level on products, services and web bank. But what really makes us the preferred financial institution in Greenland is our thorough knowledge of the Greenlandic rules, businesses, financing matters and our understanding of the cultural conditions and local community. We reach our decisions locally, and we provide answers faster than most others, says Lars Gaasvig, Commercial Lending Manager.

W

“We know the decisionmakers in Greenland.

We know the people who explores. We know the people who are close to extraction”

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Managing Director Martin Kviesgaard © The Bank of Greenland

The BANK of Greenland

â&#x20AC;&#x153;Accessibility is an important parameter for the work carried out in the Business Department of The BANK of Greenland.

The department is known for its frequent customer visitsâ&#x20AC;?

Accessibility is an important parameter for the work carried out in the Business Department of The BANK of Greenland. The department is known for its frequent customer visits. And most recently the department has introduced a new service in the form of video meetings. The active effort made by the Business Department is acknowledged by its customers. Last time the Business Department was measured, customer satisfaction reached almost 78 percent. That is a customer satisfaction level that is several percentage points above the average level at Danish financial institutions.

National expertise and local mooring With six branches in Greenland, The BANK of Greenland is well represented. The headquarters is situated in the capital Nuuk, and this is also where Account Manager Carsten Bondersholt is working on a daily basis. The Account Manager has practical experience with mineral resources projects in all phases from when the first geologist goes out with his spade to the extraction phase itself.

In particular it is escrow accounts and current accounts that we provide to the mining industry today. Naturally we also provide most financial services for example financing

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of production, buildings and working plants, yield optimization of surplus available funds, cash management, guarantees and webbased solutions, says Carsten Bondersholt, Account Manager.

The most recent collaboration between The BANK of Greenland and the mineral resources sector in Greenland is the involvement in what is expected to become the very first ruby mine in the Arctic. The project is under management of the company True North Gems, and the bank is actively engaged with advice about the day-to-day operations and expects to provide a part of the financing.

Account Manager Carsten Bondersholt emphasises that the customers have a clear advantage in The BANK of Greenland being a multi-language enterprise that professionally provides service in English, Greenlandic and Danish. At the same time the bank has close relations with Europe on a par with other modern Scandinavian banks.

The BANK of Greenland also takes pride in being consistently represented at all courses, conferences and network arrangements about the mineral resources of Greenland.

At The BANK of Greenland we are first and foremost experts in networking - we are not yet definite experts in mining. We are gaining a lot more insight into the topic, however, because we believe the sector to be one of the important new industries in Greenland, says Carsten Bondersholt, Account Manager.

© Nuna Minerals

Strong financial performances The financial performances of The BANK of Greenland are sound. The quarterly and annual

“At The BANK of Greenland we are first and foremost experts in networking - we are not yet definite experts in mining”

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The BANK of Greenland

© True North Gems

DKK 55 per share distributed reports of recent years have Did you know? last year. In May 2014 The BANK shown record results, and the of Greenland was selected as annual report 2013 shows a good 78% the financial institution with result of DKK 124 million before Level customer the second best risk profile tax and a return on shareholders’ satisfaction in the Kingdom of Denmark. equity of 15.8 percent before tax. reached last The survey was undertaken by In the wake of the global financial time the Business Niro Invest, who examined 75 crisis it is worth noticing that The Department financial institutions’ key factors BANK of Greenland has come was measured such as gearing, solvency ratio out strong and each year with and core earnings on the basis sound profits. At the same time of annual reports.

Finanstilsynet (Danish Financial The BANK of Greenland has Supervisory Authority) has had for a large number of years no substantial remarks after been able to show a sound performance, ordinary visits to the bank where in particular and the reason for this is a stable business solvency is on the agenda. There is nothing development. If I am to point to the most surprising about that, if you take a look at the important reasons, I would point to our solvency ratio of The BANK of Greenland of physical presence with six branches, approximately 20 percent against a solvency competitive prices and our very active requirement of approximately 10 percent. endeavours at the coast of Greenland, says As an investment The BANK of Greenland Managing Director Martin Kviesgaard. share is also interesting with a dividend of

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Š Nuna Minerals

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The BANK of Greenland

Lars Gaasvig, Commercial Lending Manager (left) © The Bank of Greenland

“The bank concentrates its CSR activities on efforts that heighten the financial understanding in Greenland”

Active in Greenland community The active endeavours of The BANK of Greenland also include an increasing number of Corporate Social Responsibility projects.

In 2010 the bank co-founded the association CSR Greenland known for its price nominated environmental project Saligaatsoq. CSR Greenland continually plays a part in ensuring a continued dialogue among Greenlandic business and industries about social responsibility. Most recently the bank joined the UN Global Compact network that commits its members to reporting and making policies on the environment, anti-corruption and human rights among other things.

In particular, however, the bank concentrates its CSR activities on efforts that heighten the financial understanding in Greenland.

Examples are presentations at educational institutions and a new online platform “Qassit” about everyday finances targeted pupils in the primary and lower secondary schools.

You may also be fortunate to meet one of the bank’s 115 staff members engaged in corporate volunteering. In 2014 the bank has made more than 2,000 working hours available to staff to engage in voluntary social work for associations and projects in Greenland.

The BANK of Greenland

+299 70 1234 banken@banken.gl www.banken.gl

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Photo: Lars SvankjĂŚr

Royal Ar

Greenland

Boasting more than 20 years of internal experience employees have become a massively important lifelin liner services with servicing businesses within

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rctic Line

dâ&#x20AC;&#x2122;s lifeline

of sailing in Arctic waters, Royal Arctic Line and its ne for Greenland. The Company combines its regular Greenlandâ&#x20AC;&#x2122;s emerging mineral and oil sectors

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Photo: Dan Boman

Operating in remote areas with little or no infrastructure comes with establishing mines in Greenland

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Royal Arctic Line

or more than 20 years (since 1993 to be exact) Royal Arctic Line has been a premier provider of specialist services and skills to customers in Greenland and the wider Arctic region. Wholly owned by the Government of Greenland, Royal Arctic Line and its vessels hold an exclusive concession for the transportation of general supplies by sea to and from Greenland, and between the various Greenlandic towns and settlements.

Through its subsidiary, Royal Arctic Bygdeservice, goods are also carried to all the settlements, while Royal Arctic Havneservice handles operations in the 13 biggest ports and harbours in Greenland, and at the same time represents the port authority on behalf of the state in these ports and harbours. Forwarding activities such as air freight, combined air/sea freight and consolidated are undertaken by Royal Arctic Logistics.

Furthermore, the group is also a major supporting player within Greenland’s oil and mineral exploration sectors with activities in these fields being undertaken by Arctic Base Supply, a business co-owned by Royal Arctic Line and Norwegian Norsea Group. A quick glance over the aforementioned services really does highlight why the company has come to be seen as one of Greenland’s most important lifelines.

Greenland, and indeed the other countries that exist within or between the Arctic and Atlantic Oceans, of course comes with its own unique environment and climate, and thus its own unique challenges. It stands to reason therefore that not just any company, shipping or otherwise, is suited for servicing the country. Rather it takes those with market leading experience, knowledge and capabilities to earn business in this remote part of the world.

“What you have with much of Greenland is an environment typified by difficult weather and geological conditions, and little or nothing in the way existing infrastructure,” explains Royal Arctic Line’s Commercial

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Director, Niels Clemensen. “What we have as a business is a large degree of competency, experience and understanding of what it is like to operate within the Arctic. Alongside this we have the physical assets of a fleet of vessels and equipment specifically designed with the Arctic environment in mind.”

The fleet that Clemensen speaks of consists of ten ships, each meticulously designed to overcome the challenges that operating in the Arctic possesses. The company’s biggest ocean-going vessels and feeder ships are

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of the highest Baltic ice classification and have been specially-built with double hulls and high freeboard so they can sail in Arctic waters. All the ships are fitted with cranes and are supplemented with the shipping company’s barges.

“Our vessels are designed especially for carrying out trade to and from Greenland, and for sailing on the North Atlantic, which is of course a very rough sea,” Clemensen continues. “All equipment on board is designed to operate down to -30 degrees,

Royal Arctic Line

Royal Arctic Line’s fleet is designed for Arctic conditions and able to operate just about everywhere in Greenland

“Our vessels are designed especially for carrying out trade to and from Greenland, and for sailing on the North Atlantic”

which is the standard that we work to given that we understand the demands that can be placed on this equipment, especially during the Arctic winter. It is vital to remember at all times also that when working in this part of the world there is almost never a time when there isn’t a huge distance between yourself and the nearest spare part or support vessel. With that in mind the utmost attention to detail goes into each operation our vessels conduct.”

Arriving at Greenland in the search for minerals presents the industry with the

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challenge of overcoming a remote landscape lacking in infrastructure. Fortunately for these companies Royal Arctic Line and its subsidiaries are more than used to operating under such demanding conditions. The company prides itself on the wide range of logistical and transportation services it can offer its customers. Particular solutions of note include the transport of fuel, machineries and special cargo, regular connections to the US and Canada, consolidation of cargo before shipment, monitoring and surveying,

ice management, forwarding services and preparation for sling operation from barges.

To date Royal Arctic Line has been a major provider of logistics support during the construction and operation of several notable mines such as the Olivine Mine and Nalunaq Gold Mine in Greenland.

“The services and equipment we have available to the mineral sector are varied enough to support all stages of mineral development, be it the construction, production or operational stage of a mine’s

“The services and equipment we have available to the mineral sector are varied enough to support all stages of mineral development”

Delivering supplies to Antarctic bases includes operating directly on the ice cap

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Photo: Lars Svankjær

Royal Arctic Line

Ice management is crucial when operating in Arctic waters

life,” Clemensen enthuses. “The most important thing to remember is that all of these mines are established in the most remote of locations, miles from what few established towns there are and with practically no infrastructure in place to support their growth. What makes us unique is that we are able to reach such locations, places that other shipping companies cannot, and we have the built in knowledge, systems and capabilities required to immediate begin supporting customers in the mineral industry regardless of what stage of development they find themselves.”

Royal Arctic Line has also taken the initiative in examining other business opportunities, both in Greenland and further afield. “We also recognise the need to target specific niche markets that are best suited to benefit from our fleet and our unique

capabilities,” Clemensen highlights. “So, for example, we have spent the last five years providing supply services to Antarctic bases belonging to the likes of Belgium, Germany and the UK, to name a few countries, while one of our vessels is regularly leased out to the Norwegian Polar Institute to supply their base. These are the kinds of niche, yet hugely important, jobs that our vessels can undertake and that those belonging to other container lines are unable to.”

Royal Arctic Line

+299 34 91 00 kundeservice@ral.gl www.royalarcticline.com

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North America

Put a lot mor

The resource that North American Nickel (NAN) property could be a game changer not just for G this vital metal to develop thei 112

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an Nickel (NAN)

re nickel in

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ickel may be one of the most common elements in the earth’s crust but that does not mean that it is the most accessible. Unlike some metal commodities, the global supply of nickel is concentrated in a handful of regions of the world. According to the US Geological Survey, in 2011 Russia was the world’s largest producer of nickel followed

by Canada, Australia, Indonesia and the Philippines. It is generally believed that ‘major igneous events’ cause this otherwise inaccessible element to appear close to the earth’s surface – well igneous events don’t come much larger than the 20 mile diameter meteor that smacked into Greenland three billion years ago, tearing open a crater some 60 miles wide. It’s the oldest and biggest meteor impact identified on earth so far and its discovery in June 2012 by researchers from the Geological Survey of Denmark and Greenland (GEUS) may help to explain the abundance of nickel in the Maniitsoq area 100 miles to the north west of Nuuk.

When the meteor hit Maniitsoq, it caused nickel-rich magma from the earth’s mantle to flow up into its crust. These nickel-rich magmas are preserved as the Greenland Norite Belt, which is the focus of North American Nickel’s exploration programme.

On August 15, 2011 the company was granted an exploration license by the Bureau of Minerals and Petroleum of Greenland

N

“When the meteor hit Maniitsoq, it caused nickel-rich magma from the earth’s mantle to flow up into its crust”

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Helicopter-assisted off-loading of equipment and supplies at NAN’s Maniitsoq property in Greenland

North American Nickel (NAN)

“We hire local people not just for camp administration work but also for the more technical jobs” (formerly BMP, now the Mineral Licence and Safety Authority or MLSA). This gave the company exclusive exploration rights over an area totalling nearly 5,000 square kilometres located near Sulussugut. As Dr Mark Fedikow, NAN’s President and Interim CEO explains this was a massive area, and it was important to reduce it to a more manageable size once the most productive areas for drilling had been identified by helicopter-borne surveying. “Initially we held the largest ground position in Greenland, but part of the regulatory process requires that you diminish your asset progressively.

We have reduced ours to a little over 3,600 square kilometres now.”

NAN is probably spending more within Greenland than any other company this year – around $9.5 million. This is a very significant project for the nascent Greenlandic mining industry, and Dr. Fedikow is enthusiastic about the level of cooperation he has encountered from the government and local communities. It is tempting to compare Maniitsoq with the Sudbury Basin in Canada, whose nickel deposits are related to a meteor impact, but in fact it is geologically different and in many other ways Greenland has advantages over Canada. The first of these is in the terrain. “There is virtually no soil or tree cover, so from a helicopter you are always looking at bare rock.” This suits modern airborne geological mapping

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Emplacement of a survival hut at a NAN drill site

techniques like VTEM (versatile timedomain electromagnetic system) used for identifying electromagnetic conductors such as semi-massive to massive sulphide mineralisation. NAN has flown more than 5,700 kilometres of survey, and in these conditions Fedikow says you can maintain a constant height over the rugged terrain with the helicopter-borne geophysical survey, looking a couple of hundred metres into bedrock.

Working with the government in Greenland is a pleasure compared with many jurisdictions, he continues, because of the steps the authorities have taken to achieve transparency. The regulatory regime is straightforward, the rules clear, and the culture enabling for a responsible mining company. And Greenland has to be unique in that there is no such thing as private ownership of land – it all belongs to the state. There are no special interest groups or layers of administration to contend with.

This does not mean that local communities are any the less respected and involved, he hastens to add. Best practices are in place for consultation, maximising the level of local subcontracting and employment just as they would be anywhere else.

So on the ground the company has a crew of 34, including a number of Greenlanders.

“We do try our best to hire local people, despite the fact that there are only 60,000 people in the entire country!” There is a government supported programme that is training Greenlanders for the mining industry, he notes. “They are moving ahead

“Helicopters are critical for us to get to and from our drill sites on the property”

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North American Nickel (NAN)

NAN’s Project Manager James Sparling examining a norite rock sample, Maniitsoq property

with that, and we do hire significantly impact time in the Did you know? the people according to our air for helicopters. “Helicopters are critical for us to get to needs and the skills available. and from our drill sites on the We also hire local people not 20 miles property, he explains, so the just for camp administration Diameter of the weather impacts everything. If work but also for the more meteor that created it is kind and the sky stays clear technical jobs, helping us by the Maniitsoq till September and the results cutting and sampling of the nickel deposit we are expecting are realised, core and preparing samples the staff, the equipment and for analysis. They are doing an 10 kilometres the finance is in place to excellent job.”

This year’s optimum complete 10,000 metres.”

This summer, NAN is drilling target The three targets mentioned drilling intensively, with one will get most of the attention, eye on the weather. The 2013 says Fedikow, because NAN’s drill programme led to the clear goal is to build tonnage based on recognition of the Imiak Hill Conduit Complex nickel, copper cobalt and platinum group (IHCC) which includes Imiak Hill, Imiak North metals (PGM) mineralisation at the IHCC and Spotty Hill, three mineralised zones and potentially define an inferred resource. within 1.6 kilometres of one another. “This “Ultimately the simple question is, can we year we will drill a minimum of 4,700 metres build a resource with sufficient tonnage at a of core. That could be increased to as much grade that will allow us to go into production?” as 10,000 metres, but that depends on That question is being addressed through results and the weather. In August fog can

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Dr. Mark Fedikow President & Interim CEO

Cecil Johnson, NANâ&#x20AC;&#x2122;s senior prospector examines a gossanous norite outcrop, Maniitsoq property

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Mark has 35 years of industry and government experience as an exploration geochemist and mineral deposits geologist.

He has worked for major and junior mining exploration companies and the Manitoba Geological Survey completing his employment at the Survey as Chief Geologist of the Mineral Deposits Section. In 2001, Mark was the recipient of the Provincial Geologists Medal, a Canadian national award for outstanding g e o s c i e ntif i c achievement. Mark is also a Fellow of the Association of Applied Geochemists.

North American Nickel (NAN)

“As time went on the results were so promising that we thought again and said perhaps we would build a mine ourselves”

the drill results, and constrained by a conceptual economic scenario that is being prepared in collaboration with global mining consultancy Golder Associates.

This will provide an estimate for the necessary nickel resource and the feasibility of building a mill, starting mining, , and marketing the product. The next steps will depend on what the Golder preliminary economic scenario concludes.. Originally the game plan was to define the resource and then involve a major nickel miner to come in and take the project over, he says. “As time went on the results were so promising that we thought again and said perhaps we would build a mine ourselves. That is one reason why we contracted Golder Associates to give us a picture of how we might proceed and how the economics would stack up.” It will depend on what is in the best interests of the NAN shareholders, he says, but he is looking at a precedent that was set with the discovery of the Reed copper deposit in Manitoba in 2007 by NAN’s sister company VMS Ventures. In that case a 70/30 joint venture with Hudbay Minerals was established, with Hudbay building and operating the mine and VMS retaining a minority interest. “That might be the route we take in Greenland.”

Regardless of the manner in which NAN moves forward its intention is to build a

Massive pentlandite-chalcopyrite mineralization in drill core from the Maniitsoq property

nickel-copper-cobalt-PGM resource that will lead to an exploitation licence application.

The Greenland government is supportive and keen to see this become one of the early producing mines – one that will put Greenland firmly on the world nickel map at a time when stalled infrastructure in developing economies is expected to get under way. Nickel demand is directly linked to infrastructure growth, a fact that will not be lost on investors as they look at North American Nickel.

North American Nickel (NAN)

604-986-2020 info@northamericannickel.com @NAmericanNickel www.northamericannickel.com

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The Mine her ancient Ruby yields True North Gems An exciting gemstone project promises to be the first fruit of Greenlandâ&#x20AC;&#x2122;s new mining era: we spoke to True North Gemsâ&#x20AC;&#x2122; enthusiastic President and CEO about building a new industry

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Nick Houghton, President and CEO, holding a sample at Qaqat Aqulerit

he finest rubies are rarer and more valuable than diamonds and for many the icy brilliance of the latter is no match for the colour, warmth and romance of the former. Their prices are on the rise too: the record of just under $275,000 per carat set in 2005 has since risen to over $550,000. The worldâ&#x20AC;&#x2122;s richest source of fine rubies, Burma, is still under an embargo and the market

T

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is hungry for gemstones of that quality, particularly if they can be certified ethical.

In that context, True North Gemsâ&#x20AC;&#x2122; Aappaluttoq Ruby Project is coming on stream at just the right time for the ruby market, which is worth $2.1 billion annually. Basically, ruby is a form of aluminium oxide (Al2O3), or corundum, which at nine on the Mohs scale sits just one place lower than the hardest element

True North Gems

“Once the mine life is completed and the area reclaimed it will just look like a glacial lake again”

diamond. Demand today, says Nick Houghton, President and CEO at True North Gems, who has lived and breathed gemstones since he started work in 1974, is almost entirely from the jewellery trade: “There are some industrial uses for corundum but the main one, as an abrasive, is nowadays satisfied by synthetic material.”

The Aappaluttoq Ruby Project, presently 100 percent owned by True North Gems is

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Rough surface showing at Qaqat Aqulerit

a unique opportunity for the world market to source first quality traceable gemstones that satisfy their customers’ growing demand for jewels that are free from any taint of conflict or human exploitation. Both ruby and pink sapphire (red and pink varieties of corundum), are found here. Multi crystalline stones weighing more than 80 grammes (400 carats) have been found.

Located on the south-west coast of Greenland, about 160 kilometres south of the capital Nuuk, the site is accessible all year round, and just four kilometres from open water. The mine is now fully permitted since the local authority, the Municipality of Sermersooq and City Council, approved its Impact Benefit Agreement in June (IBA). In Greenland an IBA, essential for every prospective mine, is no formality – it testifies to the need to develop the project in a sustainable manner, with jobs, training opportunities and economic benefit to the local community, Houghton emphasises. “We were able to show that everything is in place.

The IBA was a huge achievement – it is a partnership between us and the communities and the people of Greenland.”

That was just the latest in a string of achievements this year for the company.

In March it was granted a 30-year mining licence, or exploitation licence, paving the way to mine construction, which True North Gems is looking to commence later this year. Nick Houghton gives full credit to the Greenlandic authorities, in particular the Ministry of Industry and Mineral Resources and the Mineral Licensing and Safety Authority (MLSA,

“The IBA was a huge achievement – it is a partnership between us and the communities and the people of Greenland”

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True North Gems

Rough Ruby and Pink Sapphire liberated from host

formerly BMP) in smoothing the partner LNS Greenland who Did you know? path to this vital milestone: “We will earn a project share of 20 percent by doing so, an are working in a country that experienced company that recognises that you need to be 30 years combines Greenlandic and able to plan long term. That long Duration of TNGs’ Norwegian expertise. “Impact term thinking on the part of the mining licence will be minimal. This is a simple government is essential to the open pit: Once the mine life success of any mining operation: 100 is completed and the area you have to be able to work with Personnel reclaimed it will just look like a the government as well as the employed at full glacial lake again, with no visual local people.” production sign it was ever there. There will The exploitation be reclamation of roads and the agreement was followed by camp, of course but minimal the operating licence and invasive action. There’s no massive road rigorous environmental and social impact programme, no blasting through rock.” assessments. Greenland may seem a Though it’s a rich deposit, it is a bit of a relatively sparse country, both in terms of myth that one can pick up rubies from the population and vegetation, but that is part surface. “The ore body runs like a spine of the reason it is determined to develop through the middle of the mine,” he explains. its resources with minimal adverse impact “The reason you can find anything at all on on either, Houghton insists. The open pit the surface is that there is no overburden mine and its infrastructure will be built as in Greenland. It is bare rock with only a few a turnkey operation by True North’s JV

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mosses and lichens to cover it. But you cannot pick much up because the material is locked in the host rock.” Unlike a mineral ore that can be crushed, this material is extracted almost surgically from the spine, in blocks that are broken down and go through an irritative crush system, which he describes as more of a ‘squeezing’ than a ‘pounding’ operation.

Once the gemstones have been liberated they are taken to the next stage of the process - dense media sorting (DMS) magnetic sorting (MS) and optical sorting. DMS and MS depend on the fact that the host rock is lighter and

the corundum will sink. Optical sorting is simple - the host rock is grey-black in colour, the corundum red and pink. At the end of the sorting stage gemstones go on for secondary cleaning and grading.

At full production the company will employ up to 100 people, the majority based at the mine site, the remainder at the administrative and downstream grading centre in Nuuk. For the time being True North has taken premises within the Bank of Greenland building, but hopes to later build its own secure premises in the city for processing the gemstones and

“We need builders, mechanics, electricians, chefs, and we help them acquire the more specialised skills”

Taking geological notes at the Aappaluttoq Deposit and Sarfaq Showing

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True North Gems

Bent Olsvig Jensen, Managing Director, at the Aappaluttoq Camp

setting up a training centre where local people will be taught the skills involved in grading, cleaning, selecting and packing the stones.

Mining may be a new industry, but Greenlanders are already well versed in many of the skills it needs says Houghton. “The Cummins and Iveco engines used in fishing boats are just the same as the ones we use in mining trucks. If you can work on the one you can work on the other. Electricians and mechanics in the local population can bring those skills – it is a matter of moving your existing skills to a different challenge! We need builders, mechanics, electricians, chefs, and we help them acquire the more specialised skills.”

His priority is now to complete the project’s capex requirements, though that task has been made considerably lighter by the JV agreement with LNS, which has brought in $23 million, or 60 percent of the money needed. He is trying to educate investors who, while they may be familiar with the landscape of mineral mining, where a resource is defined

in terms of ounces or pounds of defined value on the metal exchanges, may not appreciate the added complexity of gemstone mining where the product extracted can vary in value from two to two thousand dollars per carat. He would like them to look at the example of another listed gemstone company, Gemfields PLC, which has proved through the performance of its Zambia emerald deposit that when a company comes to market with a consistent supply of goods its share price can increase dramatically. Gemfields has doubled in the last year, and he is confident the same will happen with True North.

True North Gems

604.687.8055 info@truenorthgems.com @TrueNorthGems www.truenorthgems.com

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Where clean power starts Greenland Minerals and Energy The Kvanefjeld Project of Greenland Minerals and Energy has been boosted by a new technical partnership and progress in both Greenland and Denmark towards regulation for radioactive materials

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Looking south over Narsaq towards the north Atlantic

ince we last looked at Greenland Minerals and Energy A/S (GME), a subsidiary of Perth (Australia) based Greenland Minerals and Energy Ltd, a great deal of progress has been made. To recap, GME entered the Greenland scene in 2007 when it acquired a majority interest in an exploration licence covering the northern Ilimaussaq Complex, subsequently increasing that to 100 percent. The Kvanefjeld is the largest global example of a uranium and rare earth deposit, so it contains two of the most

S

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sought after groups of raw materials, Rare earth elements (REEs) in particular make up a group of metals that have properties that are needed in mobile communications, battery technology, green energy generation, superpowerful magnets, smart lighting and a host of other up and coming technologies.

Currently China has a massive lead in the mining and downstream exploitation of rare earths. It controls more than 90 percent of global REE production, and. The quota system by which it has controlled the market

Greenland Minerals and Energy

“In April we signed a MoU with NFC with the aim working together to establish a Strategic Cooperation Agreement”

today has discouraged the growth of these industries in the western world and skewed the market, so any major alternative source that is accessible and reliable is bound to create a buzz. With the scale to supply at least 30 percent of the urgent and growing need from European and North American markets GME’s Kvanefjeld project is well placed to become one of the world’s largest and most cost-effective producers of these speciality metals. Only ten kilometres from ice-free water, 40 kilometres from an international

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Southern Greenland allows for almost year round exploration

airport and close to available low cost power it has a multitude of advantages, says the company’s Managing Director Rod McIllree.

A major stumbling block until recently was the reluctance of Greenland and its mother country Denmark to even consider mining radioactive materials. Because the REEs are associated with uranium they could not be extracted under the former regulation, however in October last year Greenland’s parliament voted in favour of reversing that policy in the interest of establishing a viable minerals industry.

The radical change not only made possible the further development of a mine and processing facilities at Kvanefjeld but sent a message to investors and the international minerals trade that GME had a future.

The company had been discussing development scenarios with a number of global players over the past three years, explains McIllree, but no real progress could be made while the zero tolerance legislation was in force. One of the interested parties was China’s Non-Ferrous Metal Industry’s Foreign Engineering and Construction (NFC), which has an excellent track record in the engineering, construction and operation of mines and refineries. “Once the policy change was known they were prepared to step forward, and in April we signed a Memorandum of Understanding (MoU) with NFC with the aim working together to establish a Strategic Cooperation Agreement.” This was essentially a structure within which GME and NFC would formulate a full development scenario for a complete vertically integrated business.

“The Feasibility Study has optimised the project on what are known as the critical rare earths, dysprosium, neodymium, yttrium, terbium and europium”

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Greenland Minerals and Energy

Local Greenlandic workers

A mine, a concentrator and “The Feasibility Study has Did you know? an intermediate refinery would optimised the project on what are known as the critical rare be constructed in Greenland, earths, dysprosium, neodymium, and a dedicated separation 7,000 tons yttrium, terbium and europium” facility built in China. A jointly Target annual explains McIllree. “So we are owned marketing company production of tailoring the project to 7,000 will sell the minerals to their critical REs tons of critical REs per annum. end users. It is likely that GME That dovetails with the NFC will be a majority partner in the 956 separation facility, which is Greenland operations, a minority million tons designed to handle a similar partner in the separation (taking Total indicated quantity.” NFC is very keen to into account IP and technology and inferred get a long supply line of these – after all NFC subsidiary minerals at particular elements, he adds, Guangdong Zhujiang Rare Kvanefjeld and there are a lot of synergies Earths Company was the first with this arrangement. to achieve full separation of all Getting this agreement in place fifteen rare earth elements in was a big step forward, and demonstrates the China and is recognised globally as a leader willingness of Chinese companies like NFC to in rare earth separation technology). The move forward in a rapidly changing rare earth marketing company would be split evenly landscape. With a major overhaul of regulations between the JV partners. inside China, the top Chinese rare earth groups Though all the rare earths are present at are looking to align with high-quality offshore Kvanefjeld, not all are economically viable.

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“We now have enough money to fund the application and complete the bankable feasibility study and we expect to lodge the mining licence application early next year” projects and Kvanefjeld is a clear standout.

It also demonstrated their confidence that obtaining the mining licence, or exploitation licence, is something of a formality, given the amount of work and political capital that has

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been put into the project thus far. “We now have enough money to fund the application and complete the bankable feasibility study and we expect to lodge the mining licence application early next year.” He adds that if

Greenland Minerals and Energy

Looking north up the Narsaq Valley

nothing untoward is identified it should take no more than a year to approve and grant the licence, opening the way for construction to start at the beginning of 2016.

And problems are unlikely. The environmental and social impact assessments (EIA and SIA) are close to being finalised. The EIA report, compiled by Danish consultants Orbicon will cover the entire exploitation period from mine development prior to the mine start, going back to the 1970s, until closure of the mine and a subsequent monitoring period. Grontmij, also a Danish firm, has worked with GMEL on establishing

the baseline studies for the Kvanefjeld SIA since 2010. It has a deep understanding of social issues affecting Greenland and will look at the amount GEM has injected into the local economy through direct and indirect employment and procurement. The company has sponsored local sporting and community events, purchased computers for local schools and an internet cafĂŠ, and holds public information seminars to address any concerns and keep local people up to speed with its operations and plans.

The mining licence is about more than this, though, and is complicated by the fact

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The first drill holes were set up in 2007

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Greenland Minerals and Energy

“I simply refuse to be the victimised people of climate change… we have the right now to our own underground” Aleqa Hammond

that though the country has given the green light to uranium production and export it does not yet have the regulatory framework in place to become a player in the global trade in radioactive materials and meet the demands of its international regulator the International Atomic Energy Agency (IAEA).

As for uranium mining, processing and marketing, GME has recently appointed a respected uranium consultant James Eggins as its Manager of Uranium Marketing to take forward its increased focus on developing the uranium business strategy. Over the coming months one of the priorities will be to strike an agreement with a uranium end user, probably a nuclear energy utility in Europe or North America.

The uranium can in any case only be exported to countries that need uranium to produce clean energy in their nuclear power plants, and only if those countries have signed the Nuclear Non-Proliferation Treaty controlled by the IAEA. Rod McIllree is hopeful that this framework approved by the Danish and Greenlandic governments before the end of the year. “Without the rules and regulations to facilitate a uranium-based application our own application clearly can’t be approved, but I think the situation is closer to resolution than most people realise – a lot of work has gone into it.” Greenland is joining a well

Exploration campsite

established uranium-producers club and can take the existing IAEA framework, to which countries like Namibia, Australia and neighbouring Canada already adhere. Apart from amendments to suit local conditions, it is largely a plug and play exercise. The government is 100 percent behind the change. As prime minister Aleqa Hammond, has said: “I simply refuse to be the victimised people of climate change … we have other options than just hunting. We have the right now to our own underground.”

Greenland Minerals and Energy

+299 66 14 94 gme@gme.gl @GreenlandMining www.gme.gl

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Tanb

ready t

The world needs rare earths in quantities employment and the chance to trade in strategic position close to th 138

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breez

to roll

s and Greenland needs inward investment, n global markets while making use of its he transatlantic trade routes BE Special Report [ Greenland ]

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Diamond drilling rig

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Tanbreez

are earth elements (REEs) continue to be a hot topic. This group of 17 chemically similar elements crucial to the manufacture of many hi-tech products is causing international supply headaches. China currently produces about 90 percent of the world’s rare earths and produces more than 70 percent of the world’s rare earth magnets - neodymium in particular is used to make smaller, more efficient and more powerful magnets used in loudspeakers and computer hard drives. In order to curb environmental degradation and protect resources, China has set output ceilings, export quotas and stricter emissions standards as well as high resource taxes for some ores. 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. However, the World Trade Organization ruled that China’s export duties, quotas, and administration of rare earths, tungsten and molybdenum products were inconsistent with WTO rules.

A viable, reliable and politically neutral source of rare earths needs to come on stream soon, and the more accessible it is to global industrial markets the sooner will China’s stranglehold on these critical minerals be broken. They’ve recently discovered large deposits in Afghanistan, but who wants to start a mining operation there? Enter Greenland, where the largest REE deposit outside of China itself has been under development by the mining company Tanbreez, which under the leadership of the vastly experienced Australian geologist Greg Barnes has invested more than $40 million dollars in developing a world class deposit that will be a significant resource for many generations.

The ‘ree’ in Tanbreez stands for the rare earths, while the rest of the name is made up from the chemical abbreviations for associated minerals tantalum, niobium and zirconium. All of these are sought after as new uses are found for them in, among other things, electronics,

R

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alloys, mobile devices, car exhausts and green power generation applications, however one feature of the Tanbreez deposit is the large proportion – 30 percent – of the more eagerly sought after heavy rare earths that it contains such as dysprosium, used in lasers and commercial lighting.

Despite their name, many of the rare earth elements are quite plentiful around the world. However, the forms in which they occur in the earth’s crust are often not concentrated enough to be economically viable to recover. That is certainly not the

case at the Kringlerne deposit in southern Greenland which is probably the largest rare earth deposit in the world – certainly large enough to disrupt the market. The ore that is mined, called kakortokite, is easy to separate into three constituent concentrates; whitish feldspar, black arfvedsonite and red-coloured eudialyte; in a chemical-free magnetic process that will be carried out on site. There are many industrial uses for feldspar; eudialyte holds the REEs and will be shipped out for further processing; while arfvedsonite is attractive when polished and used by some

“The Danish Technological Institute has done some research into the use of arfvedsonite as a substitute for sand when making bricks and roof tiles”

Geology in process

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Tanbreez

Main ore body looking from west

as a mystical stone, it has no feldspar have been separated Did you know? bulk value, though that may out, there remains a black be about to change. residue called arfvedsonite, and The mining project will this would have to be contained $40 million consists of an open mine pit, in tailings dumps. However the Investment a processing plant, a port Danish Technological Institute amount in (including a helipad), a mine has done some research into developing a camp and internal connecting the use of arfvedsonite as a world class substitute for sand when making roads. A tailings deposit is deposit bricks and roof tiles.” part of the mine plan, and there is no doubt that this is an It makes a lighter and stronger 100 element that would need careful product, he says, with excellent Direct jobs for management and eventually load bearing qualities: if adopted local people remediation. Unless a better by the building trade it would at Tanbreez way can be found, that is. Hans mean that all of the material Kristian (Hank) Schønwandt is a taken from the pit could be consultant to Tanbreez: he used taken away and sold. That is a to lead the Bureau of Minerals and Petroleum fact that is very important to the Greenlandic (BMP, now MLSA), and understands better authorities, who are deeply concerned that the than most the balance between Greenland’s arrival of large scale mining could degrade the economic needs and its unique environment. unique landscape, pollute the waters around “Once the mineral-bearing eudialyte and the the coast, and leave undesirable residues.

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The only thing now holding up the construction of a working mine and processing plant is the granting of an exploitation licence.

On 21 March 2012, Tanbreez submitted to BMP a draft application for an exploitation licence covering rare earth elements and feldspars. Since then the process has been delayed, as the Greenland government works through the process of formulating new legislation to cover mining activity. One problem with this, in the opinion of Hank Schønwandt, lies in the vey uniqueness of Greenland’s geology.

Kakortokite is named after Qaqortoq, the nearest settlement to Tanbreez, precisely because it in a mineral not found anywhere else. The legislation, he thinks, should be framed to reflect the reality on the ground, rather than trying to make the deposit fit the legislation! Recent drilling at the site has shown that it contains at a deeper level other REE-bearing structures that may include different minerals, but each time a variation

Greg Barnes Chief Geologist More than 40 years in the mining industry including (but not limited to) gold, silver, rare earths, iron ore, coal, oil and gas, niobium, pot ash and platinum. This work has included head geologist duties in Australia, Asia, central and eastern Europe, Greenland and eastern Africa.

Tanbreez 400 metres high section of ore

“A hydro-electric line runs close to the ore body so we will be able to get all the power we need and there is no lack of water”

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Tanbreez

Qaqortoq port

is detected the situation changes. However it should be borne in mind that no part of the deposit contains significant uranium or thorium – a factor that delayed other projects in Greenland until it lifted its zero tolerance policy to radioactive materials less than a year ago.

Thanks to the benign processing method and the fact that the deposit adjoins a natural harbour, which can take large ships all the year round, it will have very little impact on the physical environment, says Greg Barnes. “A hydro-electric line runs close to the ore body so we will be able to get all the power we need and there is no lack of water.” The impact on the local population will be considerable, but all positive. “All the labour we are likely to want is available locally. We aim to operate with a maximum

of local workforce in all job categories too.”

With the exception of key managerial and professional positions, all positions will be offered to local workers, he promises.

Around 30 to 40 workers will be needed once construction starts, rising to a maximum of 140 at peak times over the two years it will take to complete the work. Once operational the project will support almost 100 jobs, and in a country with only 60,000 inhabitants that is a real social contribution.

Tanbreez

+299 586641 info@tanbreez.com www.tanbreez.com

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