BE.Mining

de beers: goldcorp eleonore: osisko mining: ISSUE 9 | www.bus-ex.com/mining

ima Engineering:

Making the difference between profit and loss

featuring: Mongolian regional focus

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be mining | 5

Be mining

10 12

10 Gold price

The cankered heaps of strange-achieved gold

In April 2013 the price of an ounce of gold plummeted from nearly $1,600 to under $1,400 giving rise to doubt where there had been confidence.

Regional Focus: mongolia 16 Mongolian mining

A Mongolian milestone

Mongolia is fast becoming an area of great interest for the mining community.

26 ACCL International Roads less travelled

The risk and not merely financial reward of Mongolia.

16

36 Tridum e-Security LLC Safe and secure

One of Mongolia’s leading providers of security and infrastructure services and solutions.

38 MAXAM Explosives

36 6 | be mining

Blasting through barriers

The role MAXAM Explosives is playing in the development of the Mongolian mining market.

contents

46

services: 46 IMA engineering

Cutting edge technology

A Finnish technology company with products and services that can make the difference between profit and loss for an operation.

60

60 Australian Satellite Communications (ASC) Keeping things connected

The qualities that have brought ASC such success over the years and how its acquisition by SpeedCast will take the business to the next level.

70 Botswana Chamber of Mines (BCM)

Working towards excellence

The vital role that the Botswana Chamber of Mines (BCM) is playing in helping to further develop the country’s rapidly expanding mining sector.

80

metals: 80 Toro Energy

Fuel for the future

Toro Energy is emerging as the first company to commence uranium exports from Western Australia: it is ready to establish a new industry and cement Australia’s position as a reliable supplier to the growing nuclear economies of Asia.

be mining | 7

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Precious metals: 92 Nordgold

Flexible and on the move

Since its establishment in 2007, outperforming the industry seems to have become a habit, and it has not been slow to adopt world class social initiatives either.

92

112 Goldcorp - Éléonore mine

112

partnership in northern Quebec Goldcorp’s Éléonore gold mine is paying far more than lip service to the principles of stakeholder consultation, community benefit and local content.

126 Osisko Mining Corporation The golden touch

Osisko’s Canadian Malartic mine continues to go from strength to strength, as its first quarter results clearly highlight.

minerals: 136 de beers

Forever friends

136 8 | be mining

De Beers is the world’s leading diamond company, and operates across the diamond value chain, from exploration through to retail: it takes its responsibility for growing a sustainable industry very seriously.

contents

156

156 Namibia Diamond Trading Company Bright shining light

A key part of the economies in southern Africa, diamonds are more than just another resource mineral.

168 Resource Generation (Resgen)

A major coal resource for South Africa Resgen is to all intents and purposes a South African coal mining company with a strong local partner and a huge stake in the future development of that nation.

mining Directory: 182 CAE Mining

Training the next generation

184 Chemithon corporation DO YOU NEED SULFUR DIOXIDE FOR YOUR MINE SITE?

186 epsa-labco

leading consultancy

182 188

188 gym

reliable construction

190 martin engineering global leader in innovation

be mining | 9

The cankered heaps of strange-achieved gold In April 2013 the price of an ounce of gold on world markets plummeted from nearly $1,600 to under $1,400 giving rise to doubt where there had been confidence – but gold is old and mortals are its toy Words by

10 |

John O’Hanlon

BE Mining

Gold price

BE Mining

| 11

Gold price

F

or some 30 years the price of gold hovered around the $400 mark before pushing though the $500 barrier in 2006. At one point in 2011 it almost reached $1,900 an ounce, following which it held up at between $1,600 and $1,800, but started to falter early this year up to the $200 ‘crash’ of April followed by another fall, almost as dramatic, in June. At the end of June gold had almost sunk to $1,200 an ounce.

A number of reasons have been put up to explain this price slump, with many people looking for sinister forces at work.

George Soros repositioning his exposure to gold backed ETFs; a fire sale of physical gold to the developing world; the reduction of forward gold price estimates; the prospect of ten tonnes of Cyprus gold coming onto the market (maybe presaging a landslide of sovereign gold); a simple market adjustment as large investors lose faith: all these have been suggested. The Daily Telegraph’s Thomas Pascoe thinks that the gold market has been rigged, since the UK’s gold reserves were sold off a decade ago, in a way that could make the Libor scandal look like small beer.

In a world where paper assets including money are being divorced from real value it has been natural enough for investors to focus on commodities, and in particular the precious metals like gold, which in living memory underpinned our banknotes.

Quantitative easing has been the final nail in the monetary coffin. As Pascoe

puts it: “Paper money has been stripped of meaning. It is no longer a reflection of production nor any of its components.”

Although there is a correctional market mechanism in the flight to gold, he adds: “If gold has been manipulated downwards and if that process continues, then all recourse to a store of value (other than land and property) has been taken from the individual.”

What does this mean for mining companies and the entire gold exploration industry? It is too simplistic to say that they simply respond to gold prices, but they are certainly influenced by those graphs and the outlook. The boom in mining over recent years has been occasioned to a large extent by the price gold can achieve on the markets. We have documented unprecedented activity in the disposal of gold assets, as mines that had been mothballed because they couldn’t produce at a cost that delivered a decent margin were reopened, then extended. Drilling programmes were undertaken to establish reserves in more inaccessible locations. However there’s also a correlation between the cost of extraction and the price. The large margin of around $400 an ounce that opened between 2009 and 2012 was an anomaly – costs followed prices much more closely in the preceding decade.

The market thinks in averages. In the real world costs vary from mine to mine.

If the cost of production is $900 an ounce then the mine will continue to produce

“Paper money has been stripped of meaning. It is no longer a reflection of production nor any of its components” 12 |

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as long as the bullion price is more than that. At recent levels miners could afford to go after deeper and harder-to-reach ore and investors were happy to support them: but as these levels sink it won’t take long for the climate to go cold and for us to start seeing operations put on hold. The price will rise again as supply dries up of course, but that could take a while as levels of production in the last five years have satisfied much of the demand, though here we enter the world of prediction. India sucks up a third of world gold demand. That demand is still strong – in 2012 it consumed 864.2 tonnes with a value of $46.4 billion – but the effect of private demand has skewed the economy and the Indian government is taking measures to suppress domestic demand – measures that can only further suppress world gold prices.

In its Global Gold Price Report, prepared before the crash, PwC pointed out that in 2012 the failure of some mining companies to deliver projects on time or to budget

14 |

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led to a crisis of shareholder confidence and consequent pressure on share prices.

The response of the industry was to cut waste at the top and refocus on delivering value, reducing costs, deferring capital expenditure and building up reserves.

Overall, the report says “We believe gold miners are well positioned for a promising 2013. Gold mining executives are serious about proving to the market they are once again a good investment — not just for the short-term, but for the long-term.”

After all, most of the world’s gold trade is conducted though the London Bullion Market Association (LBMA), whose average gold forecast for 2013 predicted a 5.3 percent increase to $1,753.

Well, there’s still enough of 2013 left for them to be proved right. The fundamentals have not really changed and many commentators feel in their water that the current dip is just that and that gold can quickly recover and sustain its position midway between one and two thousand dollars. Let’s look at a few reactions:

Gold price

“I intend to buy gold with every asset at my disposal today and tomorrow, and I suggest the stout of heart do the same” • I n June Morgan Stanley cut its 2013 gold price forecast by 5 percent to $1,409 an ounce and its 2014 estimate by 16 percent to $1,313 stating that: “With investor demand for safe-haven assets waning against the backdrop of a strengthening U.S. dollar and rising U.S. bond yields, market conditions for gold and silver have become markedly less favourable.”

• Goldman Sachs reacted even more strongly, saying it now expects gold to end this year at $1,300 an ounce, down 9.4 percent on its previous forecast. It sees gold ending 2014 at $1,050, down 17.3 percent on its earlier outlook.

• Reacting to the April crash, HSBC cut its gold price forecast for 2013 from $1,700 to $1,542, blaming the price drop for damaging investor confidence, which could take many months to be restored.

If all this seems terribly cautious, and depressing to a gold miner wondering whether to shred the five-year plan, then it might be better to consider that the renowned gold trader Jim Sinclair thinks the manipulators are losing control of the market. He has sent an email alert advising precious metals investors that, knowing the system is in collapse, he intends to buy gold “with every asset at my disposal today

and tomorrow, and I suggest the stout of heart do the same.” On July 13 he said: “Gold will now rise to $1,650 then react after which it will challenge and exceed the old high. If paper gold survives this move for physical gold’s emancipation from fraudulent paper as the price determinant, gold will still trade at $3,200 to $3,500 per ounce.

If, as I believe, the new Russian and Singapore physical gold exchanges plus more physical gold exchanges that will open become the price discovery mechanism for gold, then gold will trade at $50,000 per ounce.” Gold, he points out, has historically held its value while currencies fluctuate. Don’t be put off by the volatility in the market. Volatility is a two way street. “The US dollar will decline significantly,” Sinclair predicts, “and that significant decline … will be the determining price factor fundamentally that will deliver a new high in gold, above $1,900 an ounce.”

The gold standard is a thing of the past. No currency will ever again be convertible, but gold will always be more than just another commodity. The message appears to be, have patience.

There’s a growing feeling that Comex, the New York exchange that has a huge influence on gold pricing but distorts the market by detaching it from physical bullion, is close to collapse as its inventories get too low for it to continue – bars are best.

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regional focus:

A Mongolian milestone Mongolia is fast becoming an area of great interest for the mining community, a fact symbolised by the Oyu Tolgoi project, one of the largest copper and gold mines in the world

written by: Will Daynes

16 | BE Mining

Mongolian mining

BE Mining | 17

Regional focus:

Mongolian mining

O

Tavan Tolgoi coal site

n 10 February, 1922, the People ’s G over n ment of Mongolia signed a landmark resolution that brought a significant coal deposit in Nalaikh city under state control.

By the end of the year exploration on the deposit was complete, thus ushering in what is recognised as the birth of the mining sector in the country.

In the 91 years that have followed the mining industry has undergone a number of transformations as its role in Mongolia’s economy has steadily grown into one of its leading sectors of growth. As of 2011 mining in the country was responsible for producing 20.2 percent of its Gross Domestic Product (GDP), 69.6 percent of its total industrial output and 89.2 percent of its export product.

Coal, copper and gold form the principle reserves that are mined in abundance across Mongolia, with it hosting approximately ten percent of the world’s known coal reserves at an estimated 162 billion tonnes. In 2010 the 17 coal mines in operation across the country contributed towards it exporting 72 percent of the 25 million tonnes produced worldwide, making it Mongolia’s largest export. Perhaps unsurprisingly the largest customer for coal is China, accounting as it does for over 80 percent of all exported coal product.

The largest coal site in Mongolia is the Tavan Tolgoi, owned by the government owned company Erdenes MGL and the Mongolian Mining Corporation. Located in the Ömnögovi Province it is one of

BE Mining | 19

Tridum e-Security LLC is a company that offers information and communication systems security and professional network infrastructure services. It also specializes in providing solutions for the planning, implementation and maintenance of banking software and hardware.

It can provide customers with custom solutions and professional services with network architect, architecture design, security and encryption product development and evaluation, information security, unified communications, liaison center, data center, application delivery and service management.

Tridum E-Security LLC | Grand Plaza Complex, Room#701, Peace Avenue-46, BGD district | Ulaanbaatar-210535, Mongolia Mobile:976-99907206 | Tel:976-70120072 | Fax: 976-70110072 | www.tridum.mn

Mongolian mining

regional focus:

Coal truck leaving Tavan Tolgoi on route to China

the world’s biggest untapped coking which it hopes will be beneficial to its own and thermal coal deposits boasting an economic advancement. estimated resource of 6.4 million tonnes.

While coal now holds the title of being While China is far and away the largest Mongolia’s largest source of income it was client of this deposit, Russia is also likely to as recently as 2010 that copper held this become a serious bidder for this coal once a position. Indeed Mongolia remains the 1,000 kilometre rail link twelfth ranked country on between the two countries the plant when it comes to has been completed. copper reserves.

Today two companies in Meanwhile, on a local Mongolia produce copper scale, Mongolia has also concentrate, the Mongolianbrought online several Mongolians employed Russian joint venture coal based power projects through the project Erdenet Mining Corporation and coal-washing plants

10,888

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regional focus:

Seen

Contact us today and put your company in the spotlight!

vincent@bus-ex.com 22 | BE Mining

and the Oyu Tolgoi mine, a joint venture between Rio Tinto Group, Turquoise Hill Resources and the Mongolia government.

With the cost of bringing it into production estimated at close to $10 billion, the Oyu Tolgoi mining project represents the largest financial undertaking in Mongolia’s history.

Discovered in 2011 the mine is situation in the South Gobi Desert, some 80 kilometres north of the country’s border with China, and is believed to contain some 36 million tonnes of copper and 45 million ounces of gold.

Using both underground and open pit mining techniques, the mine will initially process approximately 70,000 tonnes of rock per day, with this figure soon ramping

Mongolian mining

Oyu Tolgoi project

up 85,000 tonnes per day. The yield from the first phase of mining will be ground through one semi-autogenous grinding mill. Expansion to new underground areas will result in an additional increase of up to 140,000 tonnes per day, with a possible increase to 170,000 tonnes per day to follow. The copper production from the

mine, from reserves that extend up to 20 miles beneath the desert, is projected to come in at 450,000 tonnes per annum for the next 50 years.

The importance of the Oyu Tolgoi mine really can’t be overstated. By the end of 2012 the project’s operators had paid more than $870 million in taxes,

“It is believed that the mine itself will likely account for more than 30 percent of Mongolia’s GDP when it reaches full production in 2020” BE Mining | 23

regional focus:

Khanbogd Oyu Tolgoi Technical Training Centre

Mongolian mining

$870 million

Copyright © 2013 Oyu Tolgoi

In taxes and fees paid by Oyu Tolgoi to the end of 2012 fees and pre-payment to the government and purchased products and services from Mongolian suppliers to the tune of $1.1 billion between 2010 and 2012.

As of 30 April, 2013, 10,888 Mongolians held jobs linked to the project, making up 89.25 percent of the total workforce, a figure that exceeds the operators’ target of having no less than 70 percent of the workforce being Mongolian during operation. In addition to the opportunities being provided at the mine site itself, those behind Oyu Tolgoi have invested more than $125 million towards local education and training, and provided financial support to more than 6,000 trainees across 21 aimags (Mongolian tribes).

On 9 July, 2013, the first convoy trucks left the Oyu Tolgoi mine, carrying with them copper destined for China. This marked a massively important milestone for the operation and for all parties involved in the project. Oyu Tolgoi is very much central to Rio Tinto’s efforts to produce new mineral supplies in developing resource hotspots and to reduce its dependence on iron ore.

Meanwhile it is believed that the mine itself will likely account for more than 30 percent of Mongolia’s GDP when it reaches full production in 2020.

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regional focus:

Roads less

It is risky and sometimes scary to get and countries like Mongolia that ar make it worthwhile – and these are b

written by: John O’Hanlon 26 | BE Mining

ACCL International

s travelled

t involved in post-conflict economies re modernizing apace: the rewards by no means just financial rewards

| research by: James Boyle BE Mining | 27

regional focus:

Camp Lonestar, a 500 man facility located in the Tora Bora region of Eastern Afghanistan

ACCL International

O

n March 1 this year ACCL International’s President, Haji Habibullah Pirzada, opened the company’s newly built headquarters in Kabul. ACCL is an Afghanistan-based company that makes use of its unique approach to partnership in a variety of post-conflict or underdeveloped regions worldwide to create wealth. It is a sign of the success of this unusual company that it had grown out of the premises it occupied since it was established in 2003. Commercial success in Afghanistan is counter-intuitive to say the least, and it’s no place to take a risk avoidance strategy. But the opportunities for people of vision are huge.

Pirzada was accompanied at the opening by his co-founder Sargon Heinrich, a cosmopolitan and multilingual former Bechtel executive whose experience included managing the provision of logistical support to the international initiative to put out the oil well fires Saddam Hussein left behind when he was chased out of Kuwait at the end of the first Gulf war. That experience must have given him a taste for unstable, challenging post-conflict, what he calls austere environments because he headed over to Afghanistan where he met Pirzada, who led a construction and dry-walling company in Kabul. Together they set about the task of building training facilities for the future development of Afghanistan, some of them based on former US military establishments.

The pair started with small refurbishment projects, gradually taking on larger assignments till today ACCL is one of the largest employers in Afghanistan, with 3,000

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regional focus:

3,000 People employed in Afghanistan

by ACCL International

ACCL provides full life support services including catering

30 | BE Mining

staff. And this growth has been organic – these are local staff, explains Paul Stukel, a co-director of ACCL International. “That has been a key part of our philosophy in Afghanistan and elsewhere, summed up in our tagline Afghans Building Afghanistan. A lot of the large players bring in their own people, do their thing and then leave. There is no legacy, no local development.”

That is a sound business model and it works in the short term. But sustainable business calls for a different approach. “If you are going to do business in Afghanistan, Mongolia, Kenya, UAE you really ought to help the local economy so that when and if you leave something of value remains.”

It is this approach that worked so well in Afghanistan, allowing ACCL to be much more effective than arms-length companies. “We know the locals – because we are the locals!” says Stukel.

This is the model ACCL International has exported to Mongolia among other places.

Just over a year ago ACCL moved into another office, in one of Dubai’s outstanding buildings, the Reef Tower. Dubai, the company’s strategic hub since 2005, is something of a contrast to the operational locations, but it is ideal for the company,

ACCL International

ACCL International construction staff

says Stukel. “Dubai is the Hong Kong of the Middle East! It’s politically stable, tolerant and very business-friendly. Given our global expansion plans, we thought it was ideally suited as our international headquarters from which to support all our international operations from a procurement, logistical and financial perspective.” Apart from Kabul and Dubai, ACCL now has offices in Nairobi Kenya, Entebbe Uganda and Chicago USA – and crucially in Ulaan Baatar Mongolia.

Mongolia is every bit as challenging as

Afghanistan. The remoteness of the mine sites, which are a primary market for ACCL, is only matched by the extremes of the weather. But that is an attraction rather than a deterrent for a company that has proven itself in Afghanistan, a country that is a war zone to all intents and purposes. “You are dealing with IEDs, local insurgency, and having to be careful who you hire because they might pose a security risk.”

Mongolia is more secure politically but it has some parallels in other areas. In

“You really ought to help the local economy so that when and if you leave something of value remains” BE Mining | 31

regional focus:

Afghanistan ACCL learned to manage people with vastly differing levels of education with basic literacy a problem in some cases. “To produce first world quality in a very difficult environment is something we have shown we can do. That impresses the mining industry because they tend to work in places that are remote and not the kind of place you take the family on vacation!”

Once again, ACCL Mongolia is a local company incorporated in Ulaan Bataar. “We are a Mongolian company that plans to stay there, using as much Mongolian labour and resources as humanly possible. Again we work very closely with the officials there, establishing our bona fides on the basis that we are there for the long term. This is not a project to us, it is a commitment to Mongolia!”

Mongolia is a treasure trove of resources, he continues, wide open to extraction projects of every kind. A single mine, Rio Tinto’s Oyu Tolgoi project, is expected to earn a third of the country’s GDP. But the activity is all exploration so far. Mining has yet to begin on the numerous sites that are under development in the Gobi Desert but when it does the activity will be frenetic. Building a mining camp, and supplying it, is very similar to building a training establishment or an academy, and there is certain to be strong demand for

ACCL’s services from this sector – it is currently developing independent camp operations in support of a number of south Gobi mines.

Typically, this might include 300-500 man accommodation blocks, shopping and dining facilities; vehicle and heavy equipment repair facilities as well as entertainment and healthcare options. Meanwhile there is no dearth of projects to keep the local team busy

“We are a Mongolian company that plans to stay there, using as much Mongolian labour and resources as humanly possible” 32 | BE Mining

ACCL International

Company President, Habibullah Pirzada reviews the construction plans at Bagram, just outside of Kabul

under its local operations manager Richard Tisdale. ACCL has built and is operating a coal storage facility in the Zamyn Uud free zone on the China/Mongolia border in partnership with Global Mongolian Holdings. Additionally it is in the process of developing a low cost housing feasibility study for the Mongolian government and mining company local resettlement and community development initiatives.

Over the years ACCL has developed considerable expertise in the application of Steel Arch Formed Structures (K-Span) to building projects. One of the more cost effective construction methods available, this has proved a low cost way of providing durable commercial buildings in difficult

terrain, and has been approved by the United States military. The system’s primary application is for warehousing and multiuse structures required to comply with a range of national and local specifications, and the characteristic round arched roofs of these buildings can be seen at ACCL projects throughout Afghanistan. The Mongolia subsidiary is now building ten K-Span warehouses for an agribusiness conglomerate in north-eastern Mongolia.

As the Mongolia business grows the country can expect to benefit from some imaginative interventions on the CSR front, though as yet nobody knows what they will be. In Afghanistan the company built orphanages, though its highest-profile project was its

BE Mining | 33

regional focus:

ACCL helped support Skateistan, a co-ed skateboarding school in Afghanistan

ACCL International support of Skateistan, the world’s first co-ed skateboarding school which takes Afghan boys and girls of all ethnicities, genders, and socioeconomic backgrounds, teaching them not only skateboarding skills and skateboarding instruction, but also healthy habits, civic responsibility, information technology, the arts, and languages. ACCL built at its own expense the largest indoor skateboarding facility in Asia for the internationally known project. “When boys and girls spend their one day a week at Skateistan it is sometimes the only square meal they get.�

Another very imaginative project initiated in Afghanistan by ACCL founder Sargon Heinrich is a clothing design business that turns traditional Afghan materials and dress styles into high fashion, and sells it in New York, Paris or London, creating much needed local employment for women in the process.

Thinking this way, Paul Stukel suggests, embeds the business in the minds and hearts of the people and differentiates it from the fly-in-fly-out, high security operations that typify service contracts in dangerous or demanding territory. The company has never had a confrontational situation with any of its employees, he says, largely because it has always consulted the traditional leaders when setting up a project. In a highly diverse tribal country like Afghanistan where not everyone gets along, this is the prudent approach.

For more information about ACCL International visit: www.acclinternational.com

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regional focus:

Safe and

secure One of Mongolia’s leading providers of security and infrastructure services and solutions

written by: Will Daynes research by: Will Kirby

Tridum e-Security LLC

S

ince 2005, Tridum e-Security has been providing high quality services and solutions to all manner of industry fields including the finance, enter pr ise, t e l e c o m mu n i c a t i o n s , transportation, logistics, mining and government sectors.

Today the company is recognised for offering information and communication systems securit y and professional network infrastructure services, as well as being an expert provider of planning, implementat ion a nd maintena nce solutions that are linked to banking software and hardware.

Tridum e-Security boasts a workforce made up of qualified and experienced individuals, among them certified engineers who have graduated from both domestic and foreign universities, and have a track record of exchanging experience with specialists from the likes of Cisco, Thales, and many other wellknown companies.

These employees are one of the primary reasons for the company’s success and are fundamental to its ability to provide its clients with customised solutions. It also provides professional services in the form of network architect, architecture design, security and encryption product development and evaluation, information security, unified communications, a liaison centre, data centre, and application delivery and service management.

Tridum e-Security commits itself to guaranteeing stable network performance

and excellent efficiency via best practice and advanced technologies so as to help customers to reduce operation costs.

The company’s mission is to be a leading company that provides update information and technology with its customers on the basis of demand for aggregated solutions of information and communication, using revolutionary techniques.

For its part, Tridum e-Security has formed business and technical alliances with some of the world’s leading providers of IT solutions such as Cisco Systems, Thales Group, Diebold Inc., Hewlett Packard (HP), Giesecke&Devrient. Therefore, the International Council of Electronic Commerce Consultants (EC-Council) has recognised Tridum e-Security LLC as an Accredited Training Centre in Mongolia.

Tridum e-Security possesses a long list of successful projects that have taken place across Mongolia on behalf of all manner of clients, from the Ministry of Nature, Environment and Tourism and the Information, Communication, Technology and Post Authority to Khan Bank, Mobicom Corporation and of course Oyu Tolgoi Co., LTD. For the latter, the company has completed projects including the supply and installation of network equipment, the configuration of various software platforms and the first two phases of IP phone development.

For more information about Tridum e-Security visit: www.tridum.mn

BE Mining | 37

regional focus:

Blasting thro

Projects like Oyu Tolgoi highligh mining market. General Directo role MAXAM Explosives is playing

written by: W research by: James B

38 | BE Mining

MAXAM Explosives

ough barriers

ht the growth of the Mongolian or Andrew Forster discusses the g in the development of the sector

Will Daynes Boyle and Abi Abagun

BE Mining | 39

regional focus:

MAXAM Explosives

I

n 2012, MAXAM celebrated its 140th birthday. Founded by Alfred Nobel in 1872, the group today stands recognised as being one of the leading service and industrial organisations operating on a global scale, with a yearly turnover of approximately one billion euros.

Specialising in the development, manufacture and commercialisation of civil explosives and initiation systems for mining, MAXAM boasts a presence in all of the world’s major and developing mining areas.

One such area is Mongolia. The mining sector within Mongolia dates back over 90 years to the nationalisation of the Nalaikh coal deposit in February 1922. In the decades since, the sector’s role in Mongolia’s economic growth has expanded to the point where, as of 2011, it was responsible for producing 20.2 percent of the country’s GDP, 69.6 percent of its total industrial output and 89.2 percent of its export product.

“A subsidiary of MA X AM, MA X AM Explosives began its work in Mongolia in 2006,” explains General Director, Andrew Forster. “Today we have two major contracts in the country, one with Oyu Tolgoi and the other with SouthGobi Sands. Much of what we have achieved to date has come in the last couple of years and has brought us to the point where we are now able to see the culmination of seven years of hard work as Mongolia becomes a rapidly developing mining region.”

As Andrew goes on to state, while mining activities have existed for the better part of a century in Mongolia, it is really only in the last ten years or so

BE Mining | 41

regional focus:

that it has really been promoted as being a mining destination of real interest. “It was in the aftermath of agreement being reached on the development of Oyu Tolgoi that we saw a significant boom in foreign direct investment into the country. While the level of this investment does continue to fluctuate somewhat there is no doubt that mining will continue to play a hugely important role in the economic growth of the country going forward.”

Oyu Tolgoi LLC is Mongolia’s largest copper and gold mining company and is a strategic partnership between the Government of Mongolia, Turquoise Hill Resources and Rio Tinto. Located beneath the surface of the Gobi desert the Oyu Tolgoi mine is thought to contain approximately 82 billion pounds of copper and 46 million ounces of gold in measured, indicated and inferred resources.

Here MAXAM Explosives serves as the blasting products and services provider, lending its considerable experience and historical excellence to Oyu Tolgoi.

The main factor behind Oyu Tolgoi’s initial attraction to MAXAM was its guarantee of security of supply of one of its flagship products, its RIOFLEX watergel explosive. A MAXAM-developed innovation that is unique to the company’s

product portfolio, RIOFLEX is designed to be safe in its manufacture, transport and use, and provides optimum results in all environmental and mineral conditions.

In the simplest of terms, without MAXAM Explosives’ products there would simply be no mine as it exists today. “The explosives we provide on-site for Oyu Tolgoi are used for open pit work, shaft sinking and lateral development, and this is being carried out

“In the simplest of terms, without MAXAM Explosives’ products there would simply be no mine as it exists today” 42 | BE Mining

MAXAM Explosives

Maxam’s latest mobile sensitising units delivering (MSUs) Rioflex 7000 at Oyu Tolgoi

by a workforce that is 90 we do. In addition to their personal characteristics percent Mongolian. These these individuals also individuals have been benefit from the robust trained up from having zero experience to the point training programmes that The year that MAXAM where they are now able to MAXAM as a group use was founded deliver all the services that internationally.” the project requires.”

The efforts made by the As Andrew will attest company to establish a local Mongolians in general possess a number workforce are very much in line with one of of important qualities that make training core philosophies that MAXAM applies to them up for such important roles much its operations in every single country. “As a less of a challenge than one would perhaps group,” Andrew says, “we have a strong social expect. “Mongolians as a whole learn programme and we are applying that here in very quickly indeed. They are extremely Mongolia with our goals being to contribute literate, pick things up quickly and possess positively to the social fabric of the country a healthy desire to learn new skills, which and improve the general wellbeing of its is vitally important considering the work people. We are not here to simply make a

1872

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regional focus:

Maxam delivering its products safely, accurately and on time

44 | BE Mining

MAXAM Explosives

20.2% Of Mongolia’s GDP that mining was responsible for in 2011 quick profit and then leave, instead we are committed to leaving Mongolia a better place for us having been here.”

Despite its best intentions the company has still had to work hard to overcome some of the legal-administrative challenges in the country. Over the last year MAXAM Explosives has been working hard to convey the fact that it is a Mongolian registered business that pays Mongolian taxes and plans to one day have Mongolians in charge of running it. “For all intents and purposes,” Andrew enthuses, “we are a Mongolian company and it is our desire to be recognised as such.”

As the company looks to the future Andrew is equally keen to highlight the fact that, as important as it is, Oyu Tolgoi is just one contract and that MAXAM Explosives’ aim is to become a major player the Mongolian market. “We are a flexible and adaptable business that is ready to face whatever the market has to throw at us as it evolves. We are very much here to stay and we will be contributing to the growth of Mongolia for many, many years to come.”

For more information about MAXAM Explosives visit: www.maxam.net

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46 | BE Mining

IMA Engineering

Cutting edge

technology IMA’s products and services can make the difference between profitability and loss for an operation seeking to improve information used by management – and imparted to investors

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

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IMA Engineering

I

Jukka Raatikainen and OreAlyzer PDSA in Perth 2013

MA stands for Innovative Mineral Analyzers and here is a company that does exactly what its name says. IMA is a technology front-runner in mining on-line analysis, and if that sounds dry, for mining companies concerned to occupy the critical space between metal prices and extraction costs material analysis can well be what decides viability. You can’t plan based on what you don’t know and IMA gives you the critical information often missing in mining; the value of the ore.

The company was formerly a part of the Finnish listed engineering group Outokumpu.

In the 1990s, faced with a difficult global market, the group restructured around its core business spinning off IMA Engineering, which next January will be celebrating its 20-year anniversary as a private company whose shares are owned by a group of individuals and investors, including its Managing Director Mr Jukka Raatikainen.

Jukka was already an experienced engineer and product manager at Outokumpu, and keen to develop products and technologies he had been working on that were then under development and bring them to market.

At the time of its foundation IMA was focused on concentrator applications, he says.

“We were making analysers for measuring concentrator slurries. We were not involved in the core business of Outokumpu which was mainly to do with analysers for base metal mines. We were developing applications in other areas.” These included the X-ray Fluorescence (XRF) QuarCon system, an on-belt analyser system for monitoring crushed ore products, mainly in limestone

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500 metres Length of core Scanmobile can analyse in a day

QuarCon 200 fast conveyor analyzer

50 | BE Mining

and ‘white minerals’, and a sampling and analysis product for the cement industry called IMACON. Setting a pattern for its future business model IMA was already working with FLSmidth, the world-leading supplier of cement plants. The QuarCon and IMACON systems are still available, though technology never stands still and these products, leading edge at the time, are now classed as the firm’s ‘traditional’ ranges, he says.

By 2000 IMA was already looking at ways to add value in the mining environment.

“The in-house technical applications we had, Laser Induced Fluorescence (LIF) for example, led to products developed for the mines. For online measurement the big hurdle is sampling: we developed sampling methods and ways of adapting them from laboratory methods to online applications.”

In a laboratory, he explains, samples are prepared, finely ground and examined in vacuum conditions. You may get a more accurate result with it on a spot sample than is possible when examining a fast-moving slurry or powder with on line methods.

However, a good degree of analysis accuracy and excellent continuous sampling representativeness can be achieved by an online analyser, giving a reading every 30

IMA Engineering

QuarCon setup in cement plant

seconds. That’s real-time information. “With laboratory testing you are always viewing the process in the rear-view mirror!” he points out.

Limestone and cement processes are more tractable than those encountered underground. “Within a mine it is extremely difficult to reach analysis that gives a picture of the area where you are loading and blasting. That is why we developed a X-ray and laser-based conveyor fast analysis applications. Concentrators are stable.

They stay in the same place. In a mine the operation is always moving and the sampling

and analysis equipment has to move with the equipment.” IMA’s OreSpex systems are designed to scan in real time the run-ofmine (ROM) ore being conveyed in mines and quarries. This is more than just a matter of good housekeeping: mines have become used to factoring in ‘waste rock dilution’ of between five and 20 percent. If too much waste material is getting into the feed the concentrator is running at lowered efficiency and that goes straight to the bottom line. “We believe it is very important to analyse the material at the point it goes on the conveyor.

We offer the technology to analyse it within

“With laboratory testing you are always viewing the process in the rear-view mirror!”

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tenths of seconds, straight from the crusher – then if anything is wrong remedial action, like sorting out the unwanted waste rock or adjusting recovery process parameters according to ore characteristics before it enters the the plant, can be taken straight away.”

However waiting till the ore is blasted is too late to really avoid dilution problems. How is it possible to be sure you are only blasting

and loading the ore and not waste rock ? To map the deposit geologists use drilling results of course, but this can be a slow process.

Seven years ago IMA Engineering came up with its first on-site drill core analyser in cooperation with its sister company Mine On-Line Service. “In any typical exploration programme,” explains Jukka, “even on a greenfield site, you need to get samples of the ore body. During the exploration phase

“Scanmobile is a factory-like process, in which these boxes are put in the scanning station and automatically analysed on the spot”

OreSpex on conveyor detecting waste

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IMA Engineering

Scanmobile in action

time is becoming very important. Investors want real time information. Quite often it can take ten years from starting drilling to getting a mine into operation. Even majors developing an established ore body don’t want to take that long: for the juniors time is critical.” The company’s response was to develop a scanning station in which cores could be analysed almost instantly and the analysis information could be delivered to mine planning programs within days or weeks instead of years as is the case with conventional technology.

The familiar pattern of exploring an area, whether in the mine or outside, is to box up the cores, log them and send them to the laboratory to be analysed. It can take six months to get the results back. “If you are in

a drilling campaign you have to wait till you have those results before you can move on to plan the next holes to drill. We developed a machine that can analyse these drill cores immediately as they are put in the boxes, he says. “It is a factory-like process, in which these boxes are put in the scanning station and automatically analysed on the spot.”

A scanning station of this type can handle up to 500 metres of drill core in a day: a drilling campaign of ten kilometres can thus be analysed within a month..

Mine ON-Line Service has been trialling and operating this service, known as Scanmobile, in the Nordic countries of Sweden, Norway and Finland since 2008 – with the emphasis on service. “The mining company doesn’t have to buy the equipment – they just pay by

BE Mining | 53

the metre!” The equipment is installed in the Scanmobile van and moved from site to site, for the duration of the drilling campaign, he adds. “The information flows automatically from the van and the geologists can see it instantly via the internet. On the same day, or within a couple of days at most, they can download very accurate images of the drill cores, examine the boxes on-screen, and read the analysis.”

In practical terms, using Scanmobile gives the client the chance to move without delay to planning the next drill hole pattern and move on to the next drilling campaign. It is a very good example of IMA’s focus on improving

Testing drill cuttings analysis

54 | BE Mining

mine efficiency and getting the most out of the ore by addressing the real issues faced by mining companies.

Scanmobile service is delivered by Mine On-Line Service (MOLS), a kind of in-house partnership that works very well. However to take the products and services to a global market it is IMA’s strategy to link up with larger equipment and systems companies where appropriate. Not all drills produce cores. It is also important to examine the material, known as drill cuttings, brought up by standard percussive or rotary drills – the information from the drill cuttings can’t be as accurate as from a core but by using

IMA Engineering

“We are sure that in ten years all mines will have orealyzer on board their drilling rigs” techniques perfected by IMA it can approach these levels. “We have now developed a method to analyse and feed online the results of drill cuttings using equipment that is installed and integrated with the drill rig,” says Jukka Raatikainen.

The new product and service, branded

OreAlyzer, will be brought to market in partnership with the equipment manufacturer Atlas Copco. The analyser will be manufactured by IMA, integrated on Atlas Copco rigs and marketed integrally with them.

“We wanted the best possible partner because this is a product with huge global potential,” he continues. “In drill cuttings analysis the challenge is to sample the material that comes out of the hole.” OreAlyzer analyses the elemental content of the cuttings, giving an instant reading. As the drill progresses it can analyse the material within 30 centimetre accuracy giving ‘analyse while drilling’ information which is processed in the rig’s on-board computer and transmitted to the mine in real time along with data about the location, depth, hardness and penetration rate. “This is the best information you can get prior to blasting. It allows you to create a 3D model telling the mine where to blast.”

OreAlyzer is nothing less than a mining revolution, he believes, giving operators a new tool to work more accurately, position their blasting correctly, identifying the cutoff line, avoiding waste material sent to the concentrator and improving health and safety too. It is now available on AtlasCopco’s highly automated D65 Smart Rock machine.

“We are sure that in ten years all mines will

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Testing prototype in the arctic

IMA Engineering

20% Typical waste rock dilution in mines have this on board their drilling rigs,” says Jukka confidently. “At present they don’t know how much ore they are losing in the waste stream. They only have average results. A new world opens when you have a 3D model of the bench.”

IMA On-Line Mine Vision is behind all these products, and others it has in development.

Accurate extraction of an accurately identified ore body and stable feed to the concentrator are business critical goals for mining companies. IMA is a research based company, and will continue to look for partners to adopt and market its products – privately owned, well-funded and with excellent links to universities and research institutions in Finland. There are many more applications for its technology says Jukka: “We are always looking for new applications in the market.”

Those attracting his interest currently include slag analysis and the optimisation of laterite ore bodies but whatever the mine’s problem IMA engineering is happy to discuss it, develop a solution, and hopefully bring it to the market in the shape of a product that will benefit the industry as a whole.

For more information about IMA Engineering visit: www.ima.fi

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company in brief IMA is a geochemical analyser supplier for customers in mining, construction, cement and industrial minerals industries. IMA’s advanced and durable on-line analyzers and systems help customers to reach optimum performance in their operations.

Products for on-line cross belt applications: • QuarCon XRF and OreSpex LIF/LIBS analyzers Products for on-line Raw meal and slurry applications: • IMACON XRF and OreSpex LIF/LIBS analyzers with sampling systems

analysers applications: • OreSpex LIF/LIBS analyzer Products for Exploration and Mine Grade Control: • Scanmobile (drill core analysis) and Sampler Analyzers for drill cuttings

Products for on-line Truck and train load

Services: • Application studies, analyzer system deliveries and support with local partners.

partners

Office

Mine On-Line Service • Mine On-Line Service Oy is a IMA’s Partner Service Company • Measuring services using IMA Engineering technologies • Scanmobile service for exploration • Visualizing the results with 3D • Process improvement projects • Sorting and grade control • Drill Cutting sampling devices, analysis and visualizing the results

IMA Luoteisrinne 4 A 3 rd floor, FIN02270 ESPOO, FINLAND

Atlas-Copco • Orealyzer

58 | BE Mining

Tel: +358-9-8678 100 Fax: +358-9-8678 1020 www.ima.fi

IMA Engineering products QuarCon Systems QuarCon System 200 System is an on-belt XRF analyzer system for analytical monitoring of crushed ore products giving the geochemical information for the mine.

IMACON Analyzer IMACON on-line analyzers are used to analyze oxide or elemental compositions in finely grinded dry powders, or in wet slurries at the concentrator or other process plant. Fast elemental analysis and control of the material ensures stable product quality all times.

OreSpex System OreSpex, Laser based analyzer systems, are designed for identification of mineral types or quality classes in mines and quarries to provide real-time information for quality control in handling and processing of ores. OreSpex analyzer can be installed to identify and estimate the amount of waste material directly from the conveyor or from the LHD scoop or from the train moving the ore.

OreSpex analyzer can be installed as a stand-alone probe or it can be connected into IMA QuarCon system to analyse elemental and mineral compositions of different ore types on-line, non-contact in both underground and in the open pit mines. The main fields of application are in dilution control of run-ofmine (r-o-m-) ore.

Blast Hole Sampler-Analyzer or OREalyzer The newest IMA product for grade control.

It can be integrated on the drilling machine.

The most important element analysis is made continuously. The results are sent to quarry or mine network. The measurements can be benefited in daily grade control done by the loaders or loading planning. The wireless network can be utilized so that the information is all the time available in the control room, loaders or trucks, all the time.

IMA Systems Our fleet carrier, the QuarCon System 400 consists of one or more QuarCon on-line analyzers with an Application Control (AC-) Station (with a local display), with connections to process equipment.

The Process Management (PM-) Station of QuarCon 400 system shows the results, as well as takes care of the calculations, data storage and data collection.

Several analyzers (up to 8), either QuarCon or IMACON, can be connected to the same PM-station, enabling a distributed control system.

Also, several PM-stations can be connected together e.g. via Ethernet, to allow for data view / system control distribution, with different user privileges.

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Keeping things

connected

60 | BE Mining

Australian Satellite Communications ( ASC)

The qualities that have brought ASC such success over the years and how its acquisition by SpeedCast will take the business to the next level

written by: Will Daynes research by: Peter Rowlston

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S

ince it was established in 1985, Australian Satellite Communications (ASC) has provided a wide range of satellite communications solutions throughout Australia and surrounding regions, building up a reputation along the way as being the leading provider of reliable, turnkey satellite communications solutions, focusing on the mining, oil & gas, construction, education, defence, and maritime, industries.

“Right from the business’s inception,” explains Paul Krzystoszek, Solutions Director, “the vision that the founder and previous managing director Chris Joseland had for the business was for it to always endeavour to be at the forefront of the sector and first with new technologies, solutions and innovations.

Utilising his considerable knowledge of the market and the industry he really helped establish the level of entrepreneurship that the business has retained ever since.”

In the years that followed the company led the industry with the development of a number of technologies including being the first to adopt its iDirect broadband IP platform, which essentially marked the dawn of the era that saw the very small aperture terminal (VSAT) being supplied on mass to customers throughout the region.

The success of ASC in the last decade can in significant part be linked to Australia’s mineral and resources boom that commenced during 2005. “In many ways,” Krzystoszek continues, “our timing in adopting the iDirect technology coincided beautifully with the boom. It was the demand of this sector for such systems

62 | BE Mining

Dish maintenance

Australian Satellite Communications ( ASC)

Dish installation

that saw us grow several-fold rapidly and that also created what remains to this day a hugely competitive market in Australia.”

Given this competitive climate it has never been more important for a business to stand out from amongst the crowd. Fortunately, as Krzystoszek goes on to highlight, this has never been an issue for Australian Satellite Communications. “Today, we use three specific words to describe ourselves: Credible, Flexible and Reliable. These are the key characteristics that have helped make ASC what it is today. In the early years we drew particular attention to

our flexibility and our ability to deliver solutions in timeframes that others simply couldn’t achieve, thus setting the standard for delivery times that exists now.”

Credible and reliable, meanwhile, are two of the most common terms used by the company’s clients to describe their experiences of working with ASC. “It was Chris Joseland’s philosophy that every little detail of what the company did would contribute ultimately to the experience of the customer,” Krzystoszek states. “He also believed that it was important that the company take an ‘under promote and over deliver’ approach. This became almost a

“The vision that the founder and previous mD Chris Joseland had for the business was for it to always endeavour to be at the forefront of the sector” 64 | BE Mining

Australian Satellite Communications ( ASC)

1985 The year that ASC was established

motto of the business and helped breed that strong sense of satisfaction from our clients that we constantly strive to retain to this day.”

In the early days of the resources boom the industry was a much different place where every customer was essentially after a basic system or product that could connect to the internet. “We have photos of the very first system to leave our facility, which consisted of a dish on a tripod stand, with a cable running from a modem into a single PC: it was that basic,” Krzystoszek says. “Today, mine sites are much more sophisticated and a much more educated market means that the focus is now on delivering value added services. These include things like wireless distribution, VoIP, link optimisation such as acceleration, web filtering and firewalling and many other associated value add services.”

With the needs of its clients evolving in such a rapid fashion it is all the more necessary for ASC to embrace innovation. It is for this very reason that the company pays particular attention to Product and Solutions Development divisions specifically tasked with investigating new technologies and developments within the industry. This division has a very simple mission and that is to help ASC get more out of the tools and solutions it has.

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“When it comes to the resources sector,” Krzystoszek says, “we know for a fact that there are a great number of projects out there that are looking specifically at how to achieve greater automation of their operations. This drive towards automation is resulting in greater bandwidth requirements at the mine sites themselves as more data throughput will be required to control various equipment and processes.

This therefore is a real area of growth that we expect to take off as more automation in mines becomes a reality.”

In December 2012, an announcement was made declaring that SpeedCast Ltd, a Hong Kong-based global network and satellite communications service provider, had completed a buyout of ASC. In joining the SpeedCast Group, ASC will be able to offer its customers a wider portfolio of products and

“In joining the SpeedCast Group, ASC will be able to offer its customers a wider portfolio of products and services and better serve thier needs”

Remote site trailer

66 | BE Mining

Australian Satellite Communications ( ASC)

Remote site communication

services and better serve its global customers’ needs beyond Australia. Meanwhile, SpeedCast will leverage ASC’s outstanding team to deliver continuity of experience for existing ASC customers, while augmenting SpeedCast’s own team.

“The biggest plus for us by joining by SpeedCast is clearly the fact that they are a global player,” Krzystoszek enthuses.

“SpeedCast has the infrastructure already in place and that means that today we can provide services on a global scale and gain access to a vast variety of solutions that we didn’t previously have. The net result for ASC is that we can now become a more aggressive player on the world stage and one that will be

on par with known global brands worldwide.”

The established immediate plan for ASC is to ensure that it remains a well organised and structured organisation, even as its integration with SpeedCast continues at pace. “We are pushing forward with remaining at the forefront of the industry in the ever changing and highly competitive industry. We have a strategy and plan in place to remain sector leaders, competitive and as always, profitable.”

For more information about Australian Satellite Communications (ASC) visit: www.ascs.com.au

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company in brief For over 25 years, customers have chosen ASC when they need reliable satellite communications.

Australian Satellite communications Pty Ltd (ASC) provides a wide range of satellite communications solutions throughout Australia and surrounding regions.

Since its establishment in 1985, ASC has steadily grown to become recognised in the industry as a leading satellite communications service provider, system integrator and supplier of satellite communications equipment in Australia.

ASC provides total satellite communications solutions, focusing on the entertainment, mining, defence, maritime, education, construction, emergency services, agriculture and oil & gas industries.

Industries served

Office

• • • • • • • • •

ASC 49 Port Road, Thebarton, South Australia, 5031

Mining Entertainment Defence Maritime Education Construction Emergency services Agriculture Oil & gas

Tel: +61 8 8443 9844 Fax: +61 8 8443 8994 Support: +61 8 8443 9844 Email: info@ascs.com.au www.ascs.com.au

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Australian Satellite Communications (ASC) Products

mining solutions

The ASC portfolio is a carefully selected range of products used to deliver the functional components of these customer requirements.

These include all the active and passive elements, from a satellite modem to a telephone handset and even equipment racks. It is recognised that there are many products available that can provide similar capabilities and as such, ASC maintain a quality management process in evaluating these various products in order to ensure that each and every product is able to be supported and delivers the value that customers have come to expect from their communications solutions ASC offers.

ASC has provided numerous satellite communications solutions to the mining and mineral exploration sector.

We have designed and commissioned point to point satellite communication systems enabling head offices to communicate with remotely located mining operation sites. High speed data, telephony, fax and e-mail have been the most common requirements.

Mining operations are predominantly remote, sometimes hundreds of kilometres from the nearest town. In recent years business satellite dishes at remote camppressures have required exploration and mining companies to increase efficiency through use of more advanced IT systems. When geoscientists analyse magnetic resonance imaging in these remote locations to determine whether to drill, the information needs to be confirmed by experts back in head office thousands of kilometres away. VSAT technology can transfer the data back to base, and the data can be interpreted by the experts and in turn direct the drillers in virtually real-time to locations that will bring larger yields.satellite dish at remote site Complex satellite communications solutions are not the only solution we can offer. Due to the stringent demands of OH&S regulations, portable satellite phones have been used extensively in remote locations to ensure the safety of personnel.

ASC has a large range of such solutions on hand and has successfully provided it’s services to this industry for many years.

Our products include: • VSAT Hub & Remote Equipment • Antennae and RF • Voice gateways and multiplexers • Asset Management Equipment • Maritime – stabilised antenna system • ReadyCONNECT™ Portable Satellite Communications System

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Working toward

CEO Charles Siwawa discusses the vital role that the Botswana Chamber of Mines (BCM) is playing in helping further develop the country’s rapidly expanding mining s

written by: Will Daynes research by: Vince Kielty

70 | BE Mining

Botswana Chamber of Mines (BCM)

ds excellence

g to sector

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Charles Siwawa, CEO of the Botswana Chamber of Mines

Botswana Chamber of Mines (BCM)

M

ining activities have been share ideas about how they could contribute taking place in Botswana to improving the mining situation in the since the nineteenth century country. Twice a year these companies would with the advent of the gold gather, along with leaders in the fields of rush in the northern part health, safety and the environment. However of the country and have since acted as the it soon became clear that for real progress backbone of the country’s economy. This to be made a dedicated office or Secretariat has been particularly true in the last four was required to carry out the functions of the decades, during which time Botswana’s group. This dedicated office was established hugely significant diamond sector has helped in 2010 with Siwawa at the helm. drive the economy to new heights. Today the Today the BCM boasts close to 30 members, mining industry remains the main driver over half of which are exploration companies, of economic activity in Botswana and is a figure that typifies the rapid increase in the forecasted to sustain the economy further number of companies now present in Botswana into the future. that are searching up and down the land for The Botswana Chamber of Mines (BCM) various minerals. Indeed the country’s mining is an organisation established sector has come a long way over 20 years ago with in a matter of a few decades the purpose of serving the from being a purely diamond and copper driven industry interests of mining and to a varied centre of mining exploration companies operating within the county, activity and this is reflected in The year the first together with associated the work of the BCM in 2013. diamond mine was industries. In its role, the BCM “One of our primary discovered in Botswana aims to ensure that legislation objectives at present,” in the country is conducive Siwawa explains, “is trying for mining companies and at the same time to diversify the economy away from being developing good working relationships with one that is single source driven and this the legislator and other stakeholders. has required the industry to look at the “The Chamber was formed with the idea potential of other minerals, rather than to represent the interests of the mining say just diamonds or copper. This approach companies within Botswana and really is also playing an important role in the promote their ideas to make sure that mining country’s Economic Diversification Drive, in the country takes place as smoothly and whereby the aim is to further rejuvenate responsibly as possible, and in a sustainable the economy of Botswana by internalising its own purchasing power in order to invest manner,” says its CEO, Charles Siwawa.

Initially the BCM was made up of a small capital across multiple industry sectors.” handful of companies which came together to Attracting foreign direct investment

1971

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(FDI) from overseas is equally fundamental to Botswana’s long-term prosperity. In this arena the BCM is working in conjunction with the government to attract investment by way of marketing what the mining sector has to offer in terms of medium-to-long term profits and growth opportunities.

As the government and the BCM look to

establish Botswana as a hub for mining activity, both are also aware that improvements do still need to be made internally to properly support the expansion of the marketplace. At the top of the list of concerns right now is the shortage of skills within not just Botswana, but the wider region.

“In order to combat this shortage,”

“we have taken it upon ourselves to focus a great deal of energy on developing the skills of Botswanan people”

Gem Drill site: exploration drilling for diamonds

74 | BE Mining

Botswana Chamber of Mines (BCM)

Smelter operations at a copper nickel mine

Siwawa highlights, “we have taken it upon ourselves to focus a great deal of energy on developing the skills of Batswana, many of whom will become the next generation of workers that will take the country into the future. We know that developing skilled people is a continuous and vital process that needs to be done to the highest of standards to remain in line with market demands.

In acknowledging this we are making our intentions of developing Botswana’s mining industry comparable to that of anywhere in the world very clear.”

Since the first diamond mine in the country was discovered in 1971 the mining sector has contributed an ever-increasing percentage towards Botswana’s GDP, a trend that shows no sign of diminishing any time soon, particular as the country braces itself for the next phase in its development. It is the BCM’s belief that the next launching pad for this particular phase will be the exploitation of Botswana’s coal reserves, thought to be the second largest in all of Africa.

“As a land locked country,” Siwawa states, “we are well aware that in order

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“Over the years the government has worked hard to develop the kinds of infrastructure networks this country needs” to generate revenue from these coal reserves a great deal of work needs to be done to improve the infrastructure of the region, particularly when it comes to road and rail networks that will be needed to transport the product to ports in Namibia, Mozambique or South Africa to be exported

76 | BE Mining

overseas. Such infrastructure will be of vital importance to the country, without which we would not be able to access the full potential of our coal reserves.”

It is the opinion of Siwawa, and many others for that matter, that despite coming on leaps and bounds as an epicentre for

Botswana Chamber of Mines (BCM)

Flamingos in the forefront of soda ash mining

mining in recent times Botswana remains grossly underexplored. Despite having a land mass equivalent to that of France, Botswana is home to little over two million people and thus only a select few areas of the country possess the necessary infrastructure to host the operations of multi-national mining players.

“Over the years the government has worked hard to develop the kinds of infrastructure networks this country needs,” Siwawa concludes, “while at the same time introducing water and power networks so that we are now able to branch out further across the land. Simply put,

this would not be the case if we didn’t feel that Botswana had an enormous amount of mineral potential still to be realised. Our diamond reserves have taken the country to where it is today, from amongst the bottom four poorest countries in the world to a middle-income nation and now we believe that with the resources that we are yet to develop, such as coal, the country can push itself even higher still.”

For more information about Botswana Chamber of Mines (BCM) visit: www.bcm.org.bw

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company in brief The Botswana Chamber of Mines is an organisation established to serve the interests of the mining and exploration companies together with associated industries. The mining industry remains the main driver of economic activity in the country and is forecasted to sustain the economy further into the future.

More exploration for minerals is taking place in the country and whilst this is a welcome development, it is essential that the progress is achieved smoothly with due regard for legislation.

The Chamber of Mines aims to ensure that legislation in the country is conducive for mining

companies and at the same time developing good working relationships with the legislator.

The direction that this industry pursues therefore is not only significant for the mining organisations, but crucial for the country’s purported buoyancy in the world economic fora.

The organisation realises the critical success of this strategy to be dependent upon its people.

MANAGEMENT AND DIRECTORS

Offices

Monty Mphathi

BCM Plot 22 Khama Crescent Gaborone Botswana

President

Sebetlela Sebetlela Chairman

Gerald N. Ndlovu Deputy Chairman

Fred Jansen

Tel: +267 391 4685 Tel: +267 391 4686 Fax: +267 391 4684 Email: bcm@info.bw

Secretary

Obakeng Moroka Treasurer

Charles Siwawa CEO

78 | BE Mining

www.bcm.org.bw

Botswana Chamber of Mines (BCM) Purpose

vision & Mission

The purpose of the Botswana Chamber of Mines is to serve the interests of the mining houses and to influence policy decisions and strategic intents within the government, non-governmental organizations and related bodies.

Vision To be a respected, effective and unified voice for the mining industry that educates and shares knowledge with its stakeholders.

values We commit to the following values which govern the way we operate and relate with our internal as well as external stakeholders.

• Unity – We will actively promote our shared purpose and commitments, speaking with one voice, and acting as one team to honour and deliver the Chamber’s business.

• Good governance – Our operations and ways of working will be characterised by compliance to good practices and ethical standards. We will be transparent and honest in our dealings.

• Meritocracy – We promote and recognise excellence in our dealings within as well as outside the Chamber.

•G ood corporate citizenship – Our business operations will benefit our communities through well managed corporate social responsibility programmes.

• Safety - We commit to conduct our business without harm to our people and the environment.

Mission We represent the interests and needs of the mining industry in Botswana.

registered members • Debswana • Tati Nickel • BCL • Morupule Coal Mine • Botswana Ash • Gope • Discovery Metals Limited • Jindal Africa • Firestone Diamonds • Mupane Gold Mining • Boteti Mining • Majwe Mining • African Copper Mining • Aveng Moolmans • Anglo Coa • De Beers Holding • Shumba Coal • Bothakga Burrow Botswana

• D-Holding • Gem Diamonds • A-Cap Resources Ltd • Hodges Resources Ltd • African Energy • Mmamantswe Coal • Walkabout Resources Ltd • Rio Tinto • Minergy

BE Mining | 79

Fuel for the fu

Toro Energy is emerging as the first company to commenc uranium exports from Western Australia: it is ready to establish a new industry and cement Australia’s position a a reliable supplier to the growing nuclear economies of As

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

80 | BE Mining

Toro Energy

uture

ce

as sia

BE Mining | 81

I

t has happened. Vanessa Guthrie told hopes – and expects - that on-going drilling us she was not anxious about the twice will extend the size of the resource and the delayed approval by Australia’s Federal lifetime of the project considerably.

Minister for Sustainability, Environment, She has invested a lot of her personal Water, Population and Communities energy in developing the project to this Tony Burke to go ahead with Toro Energy’s point, culminating in her appointment as A$269 million Wiluna uranium mine, but Toro’s Managing Director in December the uncertainty must have cast a bit of a 2012. A noted advocate of sustainability cloud over the Easter break. In the event and environmental best practice, and with the decision came through on April 2, in the an impressive track record with several wake of last October’s Western Australian mining majors, it was no great surprise Government environmental approval for when she was named as 2013 Outstanding Wiluna and completing environmental Professional Woman by the Chamber of assessment processes that have lasted almost Minerals and Energy of Western Australia. three and a half years.

But for now most of So Dr Guthrie, Toro’s her attention is focused on Wiluna. It is a calcrete hosted Managing Director, was deposit, close to the surface. delighted to realise she “The pits only go down 15 would be leading Western metres, so it will be a surface Australia’s first uranium Reactors planned by sales in 2015. “Wiluna is one strip mine,” she explains.

India and China alone of the few projects in the “The tailings are returned world capable of bringing to the pit progressively, so new uranium production to the market in the at the end of the project the landscape will medium term, when a shortfall is predicted look just as it did before.” There speaks the environmentalist, who puts a lot of effort into from 2015 onwards,” she says.

Wiluna is bang in the centre of Western listening to and working with the Traditional Australia and a thousand kilometres from Owners of the land. “There are two native Toro Energy’s head office in Perth. Toro’s title claimant groups involved, and I think flagship and wholly-owned Wiluna Uranium we have been very respectful of their cultural Project, which has a regional resource base heritage in the region. A good example is of 54 million lbs, is situated 30 kilometres where we are building a thirty-kilometre to the south of the township of Wiluna. The haul road between our two mining sites, project is the most advanced of the new Centipede and Lake Way. In determining both generation of uranium mines in Australia. the mining footprint and haul road alignment It’s expected to yield 1.8 million lbs of we negotiated with the Traditional Owners uranium oxide concentrate per year over a about areas they did not want us to disturb.”

This included an area of the Lake Way lifespan of at least 14 years, though Guthrie

48

82 | BE Mining

Toro Energy

Dr Vanessa Guthrie, Managing Director

Toro Energy

Resource evaluation pit - Wiluna

deposit which is very sealed and numbered, placed important to the local people, on pallets and loaded into so they were pleased that containers. “Our production Toro was prepared to avoid volume is just four sea these culturally significant containers – or two trucks – Overall cost of areas and respect their per month. We will take it to Wiluna mine wishes. Wiluna will use an Port Adelaide by road: it’s a alkaline leach process rather 40-hour trip but as the first than the acid more commonly used in mineral producer in WA it makes economic sense to processing plants. The process of grinding, co-ship with other producers and through leaching and extracting uranium from the the currently permitted ports based in either ore to produce a concentrate is a standard South Australia or the Northern Territory.” hydrometallurgical circuit, which will be For Toro to ship through a Western built on site, next to the Centipede deposit.

Australia port would delay the cash flow, so However uranium oxide concentrate is a that would never make sense at this stage, high value, low volume product, so rather than she explains. Port Adelaide is a certified and being transported in bulk it is transported permitted secure port that has been handling by truck in sealed, lined drums, security radioactive material safely for over 30 years,

A$269m

BE Mining | 85

SPECIALISED GEOPHYSICAL SERVICES FOR THE EXPLORATION AND MINING INDUSTRY

Telephone: +61 (0) 8 9248 1421 www.bhgs.com.au

Bore-Hole Geophysical Services (BHGS) provides borehole geophysical data, directional and land survey services, with equipment services and training within Australia and mining dense areas throughout the world.

We maintain a fleet of the latest logging vehicles with advanced equipment which is maintained and calibrated regularly.

Extensive experience in down hole logging and GPS surveys, combined with skilled field technicians and a fleet of state of the art equipment make BHGS the reliable choice for your next project.

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Toro Energy

The Wiluna site at dusk

so is the quickest and most secure way to get infrastructure but Vanessa Guthrie is very excited by its potential. If you were looking the product to market.

Despite its remoteness, Wiluna has good for a precedent, you’d have to think of Tanami infrastructure thanks to the long history of Gold’s operations in the Tanami Desert, now mining in the region. The project is reached the centre of a thriving community, she says. via the Goldfields Highway and lies close to “Operations like these require an airstrip the Goldfields Gas Pipeline. Wiluna also has and investment in local infrastructure, but a sealed airstrip, which can be used for fly-in- on the positive side they give those remote fly-out arrangements, similar communities their best to a large number of mining opportunity for economic companies throughout the participation.” Theseus is outback. virgin territory, with the Toro Energy’s next potential to become an uranium project further to important new uranium the northeast on the border province for Australia, and with the Northern Territory is it could generate a lot of Depth of the uranium another matter. The Theseus employment and training deposit at Wiluna opportunities for traditional project is less well served by

120 metres

BE Mining | 87

communities in the area, one of her and Toro’s key objectives.

Whereas Wiluna is near the surface, the uranium at Theseus is found in sandstone horizons around 120 metres deep. But that does not make it harder to win. It will, Guthrie believes, lend itself to in situ recovery, or ISR mining. The method is commonly used in other uranium provinces in the world, where a well field is constructed to extract the uranium by establishing a circulating solution flow that becomes laden with uranium. The surface impact and consequent rehabilitation is minimal. The only impact is potentially on localised groundwater flows, and these would be carefully monitored and protected, Vanessa Guthrie assures.

Toro has declared a maiden resource at Theseus, with an exploration target range still to be tested to determine the size of the potential resource. The next stage? She would like to find more Theseus-type projects: “We are looking to build a portfolio of projects that will move us up the list of global producers. In the current environment, that leads you more to the ISR type deposits as the next generation of uranium deposits world-wide are likely to be lower grade and will therefore demand greater capital and operating cost efficiency.”

The opportunities for finding uranium

in Australia seem almost limitless. It holds 30 percent of the world’s economically recoverable uranium, she says. “Toro Energy aspires to be a mid-tier global uranium producer over the second half of this decade.

Currently ten major mines produce 80 percent of the global supply to world markets. The opportunity for Australia to become a more significant player lies in developing new projects like Wiluna.”

“We are looking to build a portfolio of projects that will move us up the list of global producers” 88 | BE Mining

Toro Energy

Vanessa Guthrie at the Toro offices

India and China plan aggressive nuclear power production growth in the next five to seven years. Around 28 reactors are currently under construction in China, 20 in India, and both countries plan exponential growth in their nuclear base load, she says. “The primary uranium mining projects available to fill that gap in 2016/17 are quite few. Major projects currently in production are at capacity.

Emerging projects coming into production have been significantly delayed over the last couple of years in particular.” Australia is blessed with political and economic stability unlike some of the other territories that hold uranium resources. It may take a long time to get uranium projects up and running, as evidenced by Toro’s experience with environmental permitting, but it will be

looked on favourably by offtake partners.

With the hard work of permitting now complete, all efforts will be on financing the project, probably through an equity and offtake agreement with a partner with a healthy nuclear programme in China, India, Korea or Japan. Talks are already under way: there’s no lack of interest, she hints, and her goal is to be in a position to make a final investment decision by the end of this year.

Meanwhile the company is financially secure, sitting on sufficient cash to be able to fund its planned exploration and running costs.

For more information about Toro Energy visit: www.toroenergy.com.au

BE Mining | 89

company in brief Toro Energy Limited (Toro) is engaged in advancing project test work, approvals and the definitive feasibility for Toro’s 100% owned Wiluna uranium project; exploration and assessment of the tenement portfolio of uranium and other minerals; expansion and improvement of the Company’s JORC Resource Base, and review and execution of value-adding corporate or uranium project acquisitions. The Company operates in three segments: Project Evaluation, Exploration, and Corporate and Administration. The Wiluna Uranium Project is situated 30kilometer south of Wiluna in Western Australia. The Theseus

Project consists of 3500 kilometer square of exploration licences at Lake Mackay in northeastern Western Australia. The Company’s subsidiaries include Minotaur Uranium Pty Ltd, Oxiana Energy Pty Ltd, Nova Energy Pty Ltd and Nova Energy (Africa) Pty Ltd.

MANAGEMENT AND DIRECTORS Vanessa Guthrie

Donald Clinton Stephens

Chief Executive Officer, Managing Director

Company Secretary

Martin Simon Janes

Erica Smyth

General Manager - Marketing and Project Finance

Non-Executive Independent Chairman of the Board

Mark McGeough

Andrew Coles CPA

Exploration Manager

Non-Executive Director

Simon Mitchell

Gregory Hall

Business Development Manager

Non-Executive Director

Todd Alder

Peter R. Lester

General Manager - Finance and Corporate, Company Secretary

Non-Executive Independent Director

90 | BE Mining

toro energy stock watch

Investment highlights • Following the recent submission of 10 reactor restart applications to the Japanese authorities, four reactors last week received approval to restart operations signalling a return to nuclear power in Japan

Exchange ASX

Shares 1,041.94M

Symbol TOE

Market Cap. 96.90M

Currency AUD

Div/yield -

Office Corporate Office 3 Boskenna Avenue, NORWOOD Norwood, SA 5067 Australia Tel: +61-8-81325600 Fax: +61-8-83626655

• A return to increased uranium demand and higher prices in the second half of this decade remains on track – the period targeted by Toro for Wiluna’s maiden production • Toro’s approved near-term Wiluna Project, highly prospective and advanced exploration targets and $11m cash balance at 30 June place your Company in an enviable position to capitalise on value adding opportunities presenting themselves within the industry

Key stats and ratios

Q4 (Dec ‘12) 2012 Net profit margin -1021.31% -1141.78% Operating margin -1021.31% -1137.98% EBITD margin - -467.68% Return on average assets -4.07% -10.73% Return on average equity -4.17% -11.02%

www.toroenergy.com.au

Financial information from Google Finance and Thomson Reuters

BE Mining | 91

Flexible and

Since its establishment in 2007, Nordgo a series of acquisitions: outperforming habit, and it has not been slow to ado

written by: Jo research by: Ro

92 | BE Mining

Nordgold

on the move

old has become a global player through g the industry seems to have become a opt world class social initiatives either

ohn O’Hanlon obert Hodgson

BE Mining | 93

Nordgold

G

Gold production at Bissa

old is a most conservative and passive investment, but the same cannot be said of gold mining in emerging markets.

To succeed here a company must be flexible and on the move. Its management must be adept and have a keen eye for untapped value.”

These are the words of Nikolai Zelenski, CEO of Nordgold, and they will be echoed in the most heartfelt way by many others involved in the goldfields of Africa and South America. Nordgold was established in 2007 when Severstal Group, one of Russia’s most successful metals and resources corporations, decided to move into the gold market.

Nordgold is a pure play gold producer and Severstal’s decision to diversify into this sector was taken at a time when it saw opportunities to acquire assets in Russia, Kazakhstan, Burkina Faso and Guinea. In its first five years Nordgold expanded rapidly through acquisitions and organic investment, achieving a rate of growth unmatched in the industry during that period. In 2012 Nordgold’s gold production grew to 717,000 ounces from just 21,000 in 2007. Now it has tripled its resource base to 30 million ounces, and has nine operational mines, one development project, several advanced exploration projects and a diverse portfolio of early exploration projects and licenses in Russia, Kazakhstan, Burkina Faso and Guinea.

It was in 2008 that Nordgold, which until then had only been operating in the CIS, acquired a controlling stake in High River Gold Mines Ltd, a Canadian company which held a number of assets in Russia as well as

BE Mining | 95

AFRICA GLOBAL CONSTRUCTION possesses advanced, high technology equipment. We periodically renew this equipment in an effort to continually improve our performance.

GLOBAL CONSTRUCTION AFRIQUE

TĂŠl. : (+226) 50 41 75 50 /50 41 82 32 E-mail: gc@globalconstructionafrique.com www.globalconstructionafrique.com

AFRICA GLOBAL CONSTRUCTION boasts strong, proven expertise in the mining and industrial sectors.

We are currently a major supplier of equipment and services for industries and mines in Africa.

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GLOBAL CONSTRUCTION AFRICA AFRICA GLOBAL CONSTRUCTIONS positions itself as one of the most successful African companies specialized in studies, construction and maintenance, and providing assistance to the mining, industrial and construction sectors.

We make our experience and high-tech equipment available to our customers at all times. AFRICA GLOBAL CONSTRUCTION has in his possession complete and versatile equipment including digital machinery, lifting last generation, cranes, boats, winches and elevators.

Our team Our highly qualified staff composes a number of different and complementary profiles:

• Engineers • Managerial staff • Technicians • Team leaders • Drivers operators • Technicians industrial transfer Our technical resources: • Propelled telescopic cranes • Cranes fly variables • Telescopic forklifts • Aerial lifts • Tractors double-deck • Guillotines digita E. gc@globalconstructionafrique.com www.globalconstructionafrique.com

BEBEMining WEEKLY| |972

TRANSCORDEC, Burkina Faso’s leading transportation companies, possesses a large fleet of buses that are both safe and comfortable.

Our buses seat between 12 and 70 people and provide transportation between Ouagadougou and various mining sites throughout the region.

We work with companies such as IAMGOLD ESSAKANE SA, SEMAFO, NordGold SOMITA, each of who have found us to be a partner they can almost trust.

E-mail: mamoud.sangare@fasonet.bf

Seen

Contact us today and put your company in the spotlight!

vincent@bus-ex.com

Nordgold

Bissa facilities

time and on budget – and the first gold was of Dore gold for shipment to Switzerland, poured in January 2013. The plant at Bissa is where it is further refined before being sold on designed to treat up to four million tonnes of the open market. “Based on the Q1 results we ore a year, translating into more than 170,000 believe we will exceed our initial production ounces of annual gold production. In 2013 guidance for 2013 of up to 100,000 ounces,” Bissa is officially forecast to produce up to says Igor Klimanov, Managing Director of 100,000 ounces of gold. With the launch of African Operations. the Bissa mine Nordgold has become the first One of the significant challenges during gold miner in Burkina Faso to operate two the Bissa development was a water supply mines in the country simultaneously. Bissa is issue. “Water is one of the crucial components of the ore treatment cycle,” a remarkable example of the flexibility and agility enjoined explains Klimanov. “To

by Zelenski, already reaching solve it we constructed a its production capacity in dam which allowed us to annualised terms. In the first accumulate water during the quarter of 2013 the plant wet season.” At the first look Tonnes of ore milled at milled 747,000 tonnes of ore logistics was a problem too: Bissa in Q1 2013 Burkina Faso is landlocked and produced 40,400 ounces

747,000

BE Mining | 99

“We look to develop promising people by involving them in advanced projects” and therefore has no sea access for delivering essential equipment. Bissa is situated less than 100 kilometres from Ouagadougou, Burkina Faso’s capital, and the mine is not far from the national highway which is a part of a secure logistic corridor leading to the ports of Ghana and Cote d’Ivoire. “This allows us to easily deliver all bulk equipment and supplies from these locations to the mine site with the minimum risk of disruption or delay,” he says.

100 | BE Mining

In 2010 Nordgold acquired the Lefa gold mine, located at Lero in the Seguiri Prefecture of north eastern Guinea, about 750 kilometres from the capital Conakry. In 2012 production from Lefa and Taparko accounted for approximately 42 percent of Nordgold’s total production, says Klimanov: “In 2013 we expect Nordgold’s African operations to account for about 50 percent of the company’s revenues.” And with huge reserves that will

Nordgold

Open pit at Bissa

keep it producing for another 20 years, Lefa is of great strategic significance for Nordgold.”

There’s no doubt that gold mining, while it helps to raise the general standard of living in the host country, does have an impact locally.

Nordgold has made a firm commitment to both its own employees and the communities in which it works, so when the villages of Bissa and Imiougou had to be relocated this was seen as more than just a major infrastructure project. Total compensation to the owners of the land affected amounted to 2.5 billion CFA and 380 new houses were built, as well as seven water wells, two mosques, two churches, two community centres and four schools. The dam constructed for the

plant also provides the local population with significantly more water than they previously had access to.

“Our aim was to minimise disruption to people’s lives, while maintaining or improving their communities,” says Alexey Shchedrin, Director of Corporate Communications and IR. “For example, the relocated villages will retain the approximate layout of their predecessors, reflecting our belief that the shape of communities is important to their success. Where we relocated people from agricultural land, we ensured that the new land we provided them with was of similar, if not better, quality and fertility. We were also sure to ensure that we relocated people within

BE Mining | 101

Forefront of

Project Delivery

With two decade’s experience - including involvement in 19 major mining ventures across 20 African countries - Lycopodium has an enviable reputation for successful project delivery in Africa, on time and on budget.

Lycopodium is an Australian based engineering and project delivery company with offices also in Canada and the Philippines, along with subsidiaries in Ghana, Burkina Faso, Tanzania and Mauritania.

Our experience and extensive knowledge of local operations gained working in remote regions has equipped us with the right skills to deliver fit-for-purpose engineering solutions, making Lycopodium the ‘first choice’ partner for any African mining project.

For your next project: www.lycopodium.com.au • Metallurgical and Process Development • Feasibility Studies • Engineering • Project Delivery • Procurement & Logistics Management • Health, Safety, Environment & Community Management

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LYCOPODIUM ENJOYS SUCCESS 20 YEARS IN THE MAKING Lycopodium Minerals Pty Ltd has been in Africa since “before it was fashionable”.

As an engineering services and project delivery company, it is now working with a large number of international companies looking to tap into its African experience.

Africa has been touted as one of the key emerging markets for miners. However, the importance of Africa as a market isn’t news to Perth-based Lycopodium, which made its first foray into Africa in 1993.

“We were in gold and in Africa a long time before it became a favoured jurisdiction. For instance, we were delivering the Geita project for AngloGold Ashanti in Tanzania in 1999-2000 when the price of gold dipped as low as $US280/ oz,” said Lycopodium Minerals Director of Strategic Development, Dr Greg O’Neil.

The company is currently active in undertaking feasibility studies and engineering, procurement and construction projects in Ghana, Burkina Faso,

Cote d’Ivoire, Mauritania, Tanzania and Zambia.

Its project work is focused on gold and copper developments, along with some magnetite, uranium and nickel.

The company’s clientele in Africa now includes many North American, European, South African and Australian miners who are seeking out Lycopodium because of its 20-year history in Africa.

“The reason why international mining companies come all the way to Perth to deal with an Australian Engineer is because of hard earned experience. It’s a continent where we have a skill set, familiarity and experience.” Dr O’Neil said. “But it all comes down to value and how Australians deliver value... our clients have found our process plants possess a low capital intensity, ramp up to nameplate capacity quickly and demonstrate low operating costs. In essence they are fit for purpose, which is what Lycopodium aims to bring to the African market.” www.lycopodium.com.au

BEBEMining WEEKLY| 103 |2

RANA MOTORS With 35 years of experience, Rana Motors, tyre distribution network leaders in Ghana, and West Africa Tire Services (WATS) Ltd, the Regional distributor for Goodyear Earthmoving tyres in West Africa, are associated with NordGold projects in Burkina Faso by way of supplying Goodyear Earthmoving tyres & in tyre related services for their operations.

WATS Ltd. is the ONLY company in Burkina Faso to employ qualified mining tyre professionals who provide mining tyre consultancy services, on-site tyre service providing and earthmoving tyre repairs (REMA Tip Top), and engage in supplying the whole range of mining/special equipment tyres to mining companies and contractors.

Tyre professionals from WATS and Goodyear share the aim of providing the mining

community in West Africa with better value returns on tyres supplied by them, and are heavily involved in researching the performance of tyres used in mining operations and in recommending specific products that are best suited to challenging applications. In addition they provide a complete after sales service for the tyres supplied. NordGold’s SOMITA mines at Taparko have immensely benefitted from these services.

WATS Ltd. is the retail partner of Goodyear & operates its premium retail stores, “VULCO” in Ouagadougou.

WATS also possesses supply capabilities in regards to conveyor belts used for mining applications.

E. vibi_chandra@ranamotors.com

Nordgold

Vegetable production at Bissa community

standards, appropriate local and at Bissa, where working conditions and 60 percent of unskilled industry-best environmental work is provided from Bissa standards – our 10,000 strong village itself, 30 young people workforce is the core of our work with mobile equipment New houses built for success and deserves nothing and heav y machinery Bissa employees less. Throughout all areas of and a further 70 work in our African operations we the plant itself.

Training is provided by try to employ local people where possible insists Alexey Shchedrin. internal instructors and leading external “This is both good business practice, due consultants. “We look to develop promising to the cost of employing expatriates, and people by involving them in advanced helps to develop the skills base and economies projects, such as innovation or productivity of the regions where we work. We do programmes. While training is offered to all employ expatriates where they have the in order to guarantee an acceptable standard best skills and are able to train our people of professionalism and safety, we also aim and pass on their knowledge.” to identify exceptional talent and tailor their At Taparko 631 of the 654 employees are instruction to prepare them for promotion.

380

BE Mining | 105

SO.GE.T.EL

Société générale de travaux et de constructions électriques

OUR SKILLS • The transportation and distribution of both low and medium voltage electricity • Electricity for buildings and industry • Installation of all type of air conditioning systems • Installation of the telephone and computer networks • Sound Systems • Installation of elevators and escalators • Video Surveillance • Fire Alarms • Street Lighting • Water networks

Telephone: (+ 226) 50 34 29 00 / 50 34 25 70 Email: sogetel@cenatrin.bf

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SOGETEL

Established for over fifty years, SOGETEL is a leader in its sector and enjoys an excellent reputation in the fields of transportation and distribution of electricity of medium and low voltage.

SOGETEL delivers, installs and maintains low to medium voltage transformers, power generators, air conditioning systems, cold room storage and elevators.

Our technical staff are experts in the deployment of the electricity network, maintaining public street lighting and computer networks.

On a national level, SOGETEL is a partner of SONABEL, the national electricity provider for Burkina Faso.

SOGETEL is active in the mining sector and has proved to be both competent and reliable for the daily operations of this industry.

SOGETEL follows international standards in all its installations and attaches high importance to the security of its employees and the environment.

E. sogetel@cenatrin.bf www.groupefadoul.com

BEBE Mining WEEKLY| 107 |2

Employee directing a Caterpillar truck at Bissa

Nordgold in 2012, the number of employees and contractors on site grew significantly. As a result of unusually heavy rains and a long wet season, the risk of malaria infection increased correspondingly. While the number of medical visits for malaria was significant – as were the number of confirmed cases – all cases were treated as a highest priority and no severe cases were permitted to develop. “From early on in the project a well-equipped medical clinic staffed by competent medical personnel was available on site,” explains Shchedrin. “In addition, several preventative measures were implemented, including providing employees with detailed information on the disease and the proper anti-malarial medicines to prevent mosquito bites.”

Having put in place a number of world class sustainability features at all of its sites, such as the use of native trees from Nordgold’s own plantations for the revegetation programme at Taparko, the company will be making further improvements this year.

“We will be upgrading our health and safety management systems at all our operations based on standards like ISO 14001,” says Shchedrin. “In addition to the management of tailings storage facilities, which require constant attention to design, performance and maintenance, other waste streams are managed on a daily basis to ensure conformity with Nordgold’s policies and standards,” he added.

For more information about Nordgold visit: www.nordgold.com

BE Mining | 109

company in brief Our business began in 2007, when our ultimate parent company at that time – OAO Severstal – diversified into gold mining by acquiring mines in Kazakhstan and Russia.

Nordgold is an emerging market pure-play gold producer with a business that spans from Africa to Siberia. Guided by a strategy focused on finding, developing, and streamlining assets, we have a proven track record of creating value for shareholders.

Since its establishment in 2007, Nordgold has become a global player through a series of acquisitions that transformed the company from a 21 Koz gold producer in 2007 to a 754 Koz producer in 2011. Since its creation, Nordgold has nearly tripled its resource base to nearly 30 Moz.

Nordgold is a young and fast-moving company.

We also possess the industry expertise required to turn around underperforming assets, get the most value out of our mines, and achieve a rapid return on investments.In January 2012, Nordgold [NORD:LI] commenced trading as an independent public company via a listing of GDRs on the London Stock Exchange representing approximately 10.6% of the company’s share capital.

Board of Directors Philip Baum

Mikhail Noskov

Chairman

Non-executive director

Nikolai Zelenski

Peter Lester

Chief Executive Officer

Independent non-executive director

Sergey Zinkovich

David Morgan

Chief Financial Officer

Independent non-executive director

Alexey Mordashov

Michael Nossal

Non-executive director

Independent non-executive director

110 | BE Mining

nordgold stock watch

Office Corporate Office Luna Arena, Herikerbergweg 238, 1101 CM Amsterdam Zuidoost, The Netherlands T +31 20 406 4480 F +31 20 406 4555

Exchange LSE

Shares 378,121,955

Symbol NORD

High 4.30

Currency USD

low 1.75

www.nordgold.com

products • Gold

operating territories 2011 financial highlights •R evenue of US$1,182m, up 57% (FY 2010: US$754m)

• Burkina Faso • Guinea • Kazakhstan • Russia

• EBITDA of US$ 574m, up 55% (FY 2010: US$ 370m) • 2011 EBITDA margin of 49% (FY 2010: 49%) •N et income up 89% to US$ 252m (FY 2010: US$ 133m) • Cash flow from operating activity of US$ 398m, up 60% (FY 2010: US$: 249m)

BE Mining | 111

no

112 | BE Mining

Goldcorp - Éléonore Mine

partnership in orthern Quebec Goldcorp’s Éléonore gold mine is paying far more than lip service to the principles of stakeholder consultation, community benefit and local content

written by: John O’Hanlon research by: james boyle

BE Mining | 113

Goldcorp - Éléonore Mine

J

ames Bay, a tongue of water licking out between Ontario and Quebec, is by any standards remote. The Cree nation that lives on its shores have staked their claim, not always without difficulty, to such economic development as has taken place in the region, but today the greatest impact on their way of life is undoubtedly mining.

Nobody coming into this area should doubt the need to involve the Cree, as traditional owners of the land, in their plans. Perhaps the highest profile local business to have been developed is Air Creebec, founded in 1982 and today carrying more than 60,000 passengers a year – it’s a wholly-owned Cree enterprise, and its largest customer is Goldcorp, one of the world’s fastest growing senior gold producers, with operations and development projects located throughout the Americas. Goldcorp plans to fly more than a third of that number to its Éléonore project during 2013.

A Canadian company headquartered in Vancouver, British Columbia, Goldcorp employs more than 16,000 people worldwide however one of its most significant current projects is its fast developing Éléonore project located some 200 kilometres inland from the Cree centre of Wemindji on the east cost of James Bay. When it comes into operation in 2014, according to figures from a pre-feasibility study published in 2011, it should be processing 3,500 tonnes of gold bearing ore a day, extracted from an underground resource that is known to have a lot more potential than so far confirmed. By 2017 this rate will double,

BE Mining | 115

Blais & Langlois is proud to collabored in Goldcorp Opinaca’s mine project.

Blais & Langlois your partner in James Baie area and northen Québec

LARGE-SCALE PROJECTS Experts in northern logistics, our company specializes in large-scale construction and renovation projects - from housing to mining installations.

www.vccmassenor.com

116 | BE Mining

making the Éléonore mine one of Canada’s most significant gold producers, but as the deposit is ‘open at depth and along strike’ (there is more to be discovered below and beyond the areas already drilled) the ultimate limit is not yet known.

It is a brand new, greenfield site, says Guy Belleau, site manager at the Éléonore project and it has been moved forward in an exemplary way. “In February 2011 we announced that after a successful negotiation with our Cree partners we had reached a collaboration agreement with our First Nation partners, the Cree Nation of Wemindji, the Grand Council of the Crees (Eeyou Istchee) and the Cree Regional Authority.”

The agreement will ensure that the Crees receive a fair share in the project’s financial

Goldcorp - Éléonore Mine

Concentrator under construction

benefits. It protects the environment while supporting the Crees’ social and cultural practices in a spirit of continued collaboration, and establishes shared responsibilities in critical issues of environmental stewardship, community development, local employment, and small business development. It reflects an approach to working with indigenous communities that Goldcorp hopes will provide a benchmark for its own and others to use in

future projects, he says.

Construction started in November 2011, and has progressed excellently. “We are on schedule,” says Belleau. “We have dug an exploration decline, or ramp, that is now three kilometres long and down to 400 metres in depth, enabling us to initiate our diamond drilling definition so we can get better knowledge of the detail of the ore body and definition drilling also takes place from

“We are in a win situation here with these world class infrastructures: there is no excuse now – we are going to deliver!”

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our 725 metre exploration shaft. We have also made a start on the production shaft. It is already 200 metres deep, but is projected to end up at 1,500 metres so still has a long way to go.”

A 63 kilometre road was built from the La Sarcelle Hydro-Quebec power plant which is located 60 kilometres from James Bay Highway, a 60 kilometre power line brought to the site, an airstrip constructed complete with

communications tower. All in all Goldcorp has invested $130 million in infrastructure at Éléonore. “We are in a win situation here with these world class infrastructures: there is no excuse now – we are going to deliver!”

Above ground there’s a great deal of building work in progress. The steelwork for the processing plant is substantially completed, and cladding has started. From May the ball mill that crushes the ore will

“Today 30 percent of our workforce are from the Cree communities - that is a great achievement just a year into the construction phase”

118 | BE Mining

Goldcorp - Éléonore Mine

be installed, an important milestone towards getting the processing plant ready to receive its first batch of rock from the mine.

At the moment Éléonore is a fly-in-fly-out operation served by Air Creebec, however a 400 person permanent camp is under construction. “The accommodation is just about complete, and we are starting to build a new kitchen facility, the recreational areas and a gymnasium – all that will be completed by the end of this year.” There will also be a world class tailings management facility, an administration building and a water treatment facility with a daily capacity of 26,000 cubic metres. Contributing to this hive of activity, 850 workers are currently at the site, which means that the mine is providing direct employment to around 1,300 people.

The permitting go-ahead from the Québec department of environment could have come at a better time than November 2011. Many companies would have put off construction till the spring, but Goldcorp thought it could perhaps save time by working the foundations for the concentrator and the production shaft through Canada’s unforgiving winter. “You know that every time we have obstacles or challenges our people respond,” says Guy Belleau with irrepressible enthusiasm.

“They always think outside the box and find solutions so we did pretty well to speed work up and build during the worst time of the year while keeping up the schedule.”

The solution was to build a shed over the foundations. It was, he claims, just like working in the summer! Additionally the

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“Firms like this will be training others in the community to create a sustainable industry” concrete elements for the foundation were cast in a factory off-site. “They arrived ready made so it was just like putting together Lego – that also helped us to speed up a lot.”

First and last, Guy Belleau believes in the mantra that people are the key to a successful project. “Our main challenge is to find the right people, and so far we have been very successful in attracting the best-in-class simply because of Goldcorp’s reputation in

120 | BE Mining

promoting people, safety and partnership.”

Staffing a project like this ought to be difficult, but it has not been hard. Good people really want to work for Goldcorp and gravitate to the company, as evidenced by the large number of résumés he gets on his desk.

Safety is an important pillar in attracting the best people, he continues. The results of the continuous improvement efforts were recognised by the Quebec Mining Association

Goldcorp - Éléonore Mine

Aerial view of the operations

when it awarded the FJ O’Connell trophy to Éléonore in 2011 to acknowledge an 85 percent improvement in safety at the site in the past three years. However training is also key where the First Nations are concerned.

A committee comprising 50 percent Cree and 50 percent Goldcorp employees meets regularly with the objective of maximising Cree employment, training and retention.

“Today 30 percent of our workforce are from the Cree communities - that is a great achievement just a year into the construction phase and we are very proud of it.” These are not just any jobs, he emphasises. “When someone joins us as a janitor or washing up in the kitchen, and a year later I see them working as technologists with the geology or explorations teams, or doing skilled jobs

like roof bolting underground, operating sophisticated equipment or shaft sinking it makes my job really worthwhile!”

Some operators who joined without qualifications or experience are now operating 50 tonne trucks underground, thanks to the ore extraction training program, and that really warms his heart. Now Belleau’s team along with Cree partners are developing a similar programme in mineral processing. “We think this is the first time, in Quebec anyway, that the Cree have had the opportunity to learn mineral processing. They will end up with a high school diploma in the subject.”

The first cohort of 16 students is already in session, he says.

That is important. The mine life is estimated at 15 years. It will probably be there decades

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Goldcorp - Éléonore Mine after that, but at some point it will stop but then there will be a core of experienced Cree able to take their skills anywhere in the world.

Outside of direct employment, he wants to leave a legacy of sustainable investment.

A laundry is being established by the Cree in Wemindji and Goldcorp participated in the purchase of some of the equipments. The new business has a three-year contract to wash all the overalls, all bed liners, sheets and cleaning cloths generated by the mine. “Firms like this will be training others in the community to create a sustainable industry,” enthuses Guy Belleau. “We promote Cree contractors on site too. Today 80 percent of the material brought to the site is transported by a Cree company.

And Air Creebec has added to its fleet thanks tour contract with them.”

But the First Nations are not only concerned with making money. One of Goldcorp’s proudest innovations has been the way it manages its tailings at Éléonore. “In consultation the Cree made it very clear they didn’t want traditional tailings management involving a large body of water under which we would do the tailings deposition. Water is very important to them. So we decided to filter 85 percent of the water and transport the thickened tailings truck by truck to the tailings facility.” The area is rehabilitated progressively, he adds, so that be the end of the project the tailings will have been already 95 percent revegetated.

For more information about Goldcorp - Éléonore Mine visit: www.goldcorp.com

BE Mining | 123

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

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

MANAGEMENT AND DIRECTORS Ian W. Telfer

Charlene A. Ripley

Chairman of the Board

Executive Vice President, General Counsel

Charles A. Jeannes

Russell D. Ball

President, Chief Executive Officer, Director

Executive Vice President Capital Management

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

Lindsay A. Hall Chief Financial Officer, Executive Vice President

George R. Burns Chief Operating Officer, Executive Vice President

124 | BE Mining

David L. Deisley Executive Vice President - Corporate Affairs

Timo S. Jauristo Executive Vice President Corporate Development

Colette Rustad Senior Vice President, Corporate Controller

goldcorp stock watch

Office Corporate Office Park Place Suite 3400-666 Burrard Street Vancouver, B.C. Canada V6C 2X8 Tel: +1-604-6963000 Fax: +1-604-6963001 Email: info@goldcorp.com

Exchange NYSE

Shares 812.09M

Symbol GG

Market Cap. 20.92B

Currency USD

Div/yield 0.05/2.33

financial highlights Gold production Production totaled 2,396,200 ounces for 2012, compared to 2,514,700 ounces in 2011.

Shareholder earnings Net earnings attributable to shareholders of Goldcorp totaled $1,749 million ($2.16 per share) for 2012, compared to $1,881 million ($2.34 per share) in 2011. Adjusted net earnings amounted to $1,642 million ($2.03 per share) for 2012, compared to $1,786 million ($2.22 per share) in 2011.

www.goldcrop.com

products • Gold

operating territories • Canada • United States

• Mexico • South America

Key stats and ratios

Q1 (Mar ‘13) 2012 Net profit margin 30.44% 32.18% Operating margin 31.23% 38.62% EBITD margin - 52.36% Return on average assets 3.90% 5.77% Return on average equity 5.44% 7.95%

Financial information from Google Finance and Thomson Reuters

BE Mining | 125

126 | BE Mining

Osisko Mining Corporation

The golden touch

Osisko’s Canadian Malartic mine continues to go from strength to strength, as its first quarter results clearly highlight

written by: Will Daynes research by: Jon Bradley BE Mining | 127

The mining complex

Osisko Mining Corporation

F

ollowing more than 800,000 metres of drilling and intense preparation, financing and community relations works, in addition to obtaining hundreds of permits and constructing the actual mine, it was in April 2011 that the first gold bar was poured at Osisko Mining’s Malartic mine in Canada.

The pouring of this gold bar represented a sight that had not been seen in Malartic for 28 years previously and what followed a month later was the commencing of commercial production. Today the Canadian Malartic deposit is recognised as being one of the largest gold reserves in production in the country with proven and probable reserves of 10.11 million ounces of gold. In fact this figure continues to grow to this day through on-going drilling on adjacent mineralised zones.

Osisko Mining Corporation, a mid-tier gold producer based in Montreal, Quebec, is a mining company focused on acquiring, exploring, developing and mining gold properties. In addition to the Canadian Malartic gold mine in Malartic, Quebec, Osisko continues its exploration work on the Hammond Reef Project in Northern Ontario, the Kirkland Lake Project in North-eastern Ontario, as well as other projects elsewhere in Canada and around the world.

The Canadian Malartic gold property is very much the flagship asset of the company.

Located in the heart of Quebec’s prolific Abitibi Gold Belt, immediately south of the town of Malartic, approximately 20 kilometres west of the town Val d’Or, the property includes the former Canadian Malartic underground

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Heard Tell us about your company and we’ll tell everyone else www.bus-ex.com

Osisko Mining Corporation mine, which produced more than one million ounces of As the Caterpillar dealer for Quebec and Labrador West, gold from 1935 to 1965 from Hewitt Equipment Ltd (Hewitt) has been involved as a ore containing three to six strategic supplier from the early stages of the Osisko grams of gold per tonne.

Canadian Malartic project. Relying on their expertise and The deposit is an Archean extended experience in servicing mining customers, Hewitt porphyry gold system, and Caterpillar supported Osisko in the areas of mining equipment optimization, project financing and operational consisting of a widespread effectiveness. Caterpillar state-of-the-art mining equipment shell of disseminated gold combined with innovative solutions such as Caterpillar Mine and pyrite mineralisation Star system, the industry’s broadest suite of integrated mine hosted by diorite porphyry operation and mobile equipment management technologies, and altered metasediments. helped Osisko in reaching new benchmarks of equipment Drilling and compilation reliability and mining performance. work has outlined a www.hewitt.ca gold mineralised system measuring 1900 metres by 350 metres, with a variable true thickness ranging from 40 to 270 metres to a vertical depth of 320 metres from surface. The system is open to the west and to the south at depth.

Between August 2009 and May 2011, Osisko invested more than $1 billion in capital expenditure into building its largescale mining complex, with more than half of that figure being spent directly in the AbitibiTémiscamingue region. Today, the Canadian Malartic Mine employs more than 700 people, most of them from Quebec, and they are the face of Osisko.

Osisko Mining commenced commercial production effective May 19, 2011. Commercial production is determined within the gold industry as the first continuous 30 day period of plant operation at a rate of 60 percent of design capacity, which is 33,000 tonnes per day for the Canadian Malartic Mine.

The company’s focus in 2013 is centred Gold pour on synchronising the mining and milling

Hewitt equipment ltd

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“The company’s focus in 2013 is centred on synchronising the mining and milling operations in order for the mine to reach its full production capacity” operations in order for the mine to reach its full production capacity. Part of this mission involved the construction of a second crusher plant that was completed at the end of the first quarter. This new plant incorporates the use of an XL Raptor 2000 crusher, which are among the largest cone crushers found anywhere on the planet, and its use will allow the mine to ramp up production further still

132 | BE Mining

by the end of the third quarter The main challenge that Osisko, and the vast majority of other miners throughout the world for that matter, faces today is its ability to attract and then retain a multi-skilled workforce, and the costs associated with that.

The industry is facing a shortage of technical men and women with the required expertise to take a project like the company’s Canadian

Osisko Mining Corporation

Malartic Mine forward and Osisko knows full well that no matter how good a plan may look on paper, in order for it to succeed it needs to have the right people in place to implement it.

In a concerted effort to combat this challenge the company are now in the process of identifying suitable third year graduates who would be interested in joining Osisko on a four year course of employment. At the end of this course these graduates will have gained all the necessary experience to potentially embark on a long-term career at Osisko.

On 9 April 2013 the company released a preview report of its operational results for the mine for the quarter ending 31 March 2013. Highlights during the first quarter of the year included achieving record gold

production of 106,047 ounces, record total tonnage processed of 4.23 million tonnes and record average daily tonnage processed of 48,389 tonnes per day, based on 87.5 operational days.

The month of March also saw the company achieve record one-month gold production of 42,521 ounces, record one-month tonnage processed of 1.59 million tonnes and record one-month average tonnage processed of 51,439 tonnes per day, all with an average recovery of 88 percent.

For more information about Osisko Mining Corporation visit: www.osisko.com

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company in brief Osisko Mining Corporation is engaged in the business of acquiring, exploring, developing and operating gold properties, with interests substantially in Canada. The Company’s operations, development projects and exploration activities are concentrated on its wholly owned Canadian Malartic gold property in the Abitibi Gold Belt, immediately south of the Town of Malartic, Quebec, on its wholly owned Hammond Reef gold property located near the town of Atikokan and approximately 170 kilometers west of the City of Thunder Bay, in Western Ontario and on its wholly owned Kirkland Lake gold

properties located in the Timiskaming District in Northeastern Ontario. The Company also conducts exploration activities in other regions in the Americas.

MANAGEMENT AND DIRECTORS Victor H. Bradley

Robert Mailhot

Independent Chairman of the Board of Directors

Vice President - Human Resources

Sean Roosen President, Chief Executive Officer, Director

Vice President - Legal affairs, Corporate Secretary

Bryan A. Coates

John F. Burzynski

Chief Financial Officer, Vice President - Finance

Vice President - Corporate Development

Luc Lessard

Vice President - Environment and Sustainable Development

Chief Operating Officer, Senior Vice President

Elif Levesque Vice President, Controller

134 | BE Mining

Andre Le Bel

Helene Cartier

Sergio Cattalani Vice President - Exploration

Osisko Mining Corporation stock watch

financial highlights (q1 2013) • 95,511 ounces of gold sold at an average price of US$1,627/oz compared to •9 2,400 ounces of gold sold at an average price of US$1,698/oz in 2012 •N et earnings of $17.4 million or $0.04 per basic and diluted share compared to

Exchange TSE

Shares 436.67M

Symbol OSK

Market Cap. 1,816.55M

Currency CAD

Div/yield -

Office Corporate Office Suite 300 1100, av. des Canadiens-de-Montreal, P.O. Box 211 MONTREAL, QC H3B 2S2 Canada Tel: +1-514-7357131 Fax: +1-514-9333290 www.osisko.com

• $30.6 million or $0.08 per basic and diluted share in 2012 •R evenues of $159.4 million in 2013 compared to $158.7 million in 2012 •M ine operating earnings of $55.0 million in 2013 compared to $72.5 million in 2012 • Operating cash flows of $62.5 million in 2013 compared to $82.9 million in 2012

Key stats and ratios

Q1 (Mar ‘13) 2012 Net profit margin 10.93% 11.79% Operating margin 26.66% 28.02% EBITD margin - 39.54% Return on average assets 2.59% 3.30% Return on average equity 3.22% 4.11%

Financial information from Google Finance and Thomson Reuters

BE Mining | 135

De Beers

Forever friends

De Beers is the world’s leading diamond company, and operates across the diamond value chain, from exploration through to retail: it takes its responsibility for growing a sustainable industry very seriously

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

BE Mining | 137

Close up of rough diamonds

De Beers

E

veryone agrees that diamonds are special. De Beers is unlike other mineral extraction businesses in that, while it is involved in the familiar geological and feasibility work followed by mining and beneficiation, it follows that up with the production and marketing of a luxury end product. It deals in both rough diamonds and finished gemstones, but while diamond may be chemically simple, De Beers recognises 12,000 different categories of rough diamond alone – and that is before they are polished, cut, and set. This makes diamonds less attractive as an investment. Gold is gold, but in the 1980s when a combination of economic factors led people to invest in diamonds, many got their fingers burnt, says Andrew Bone, International Relations Director. “No one would argue that diamonds hold their value and are a good long term store of wealth – but you do have to know just what you are buying.”

Investing in diamonds requires specialist knowledge. The business therefore depends on a lively downstream market to support its trading. Bone says there is every reason to be confident that the market will continue to grow, driven by demand from emerging markets, China in particular. Though ‘middle class’ is an elusive term to define, Wang Xiaolu, an economist and deputy director of the National Economic Research Institute based in Beijing predicts that the Chinese middle class will rise from just over ten percent of the population in 2009 to over 40 percent in 2020 and more that 70 percent by 2030. They may not all want to

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The Process Plant - a view across the large thickeners at the Venetia plant

buy diamonds, but China is really starting to participate in luxury goods markets, and with midstream and downstream diamond beneficiation, Bone notes. “They are building their capacity to cut and polish rough diamonds, and they already have robust institutions overseeing the industry.” As a good indication of how China is determined to be seen as a responsible trader, it is currently vice-chair of the Kimberley Process, established in 2003 to cut off the trade in conflict diamonds, and will take the

chair of that organisation next year.

However the Kimberley Process is only one of a number of ways in which the authenticity and origin of diamonds can be assured. Another is the Forevermark, De Beer’s proprietary diamond brand that offers a promise of beauty, rarity and responsible sourcing. Each Forevermark diamond is inscribed with a unique serial number and Forevermark icon, invisible to the naked eye, using proprietary technology. “As a world class company, consumer confidence is

“Shifting operations to Gaborone is at the forefront of the move to foster ‘resource nationalism’” 142 | BE Mining

De Beers

$2 Billion Investment at Venetia mine

paramount to us. To hold onto that you have to always be one step ahead of the issues, plan for them and act accordingly. De Beers is very proactive; always looking to improve existing processes and engaging in new ones.”

In fact, consumer confidence is the driving force in an approach to operating responsibly and sustainably that goes right back to the preliminary geological survey, according to Dr Nicky Black, Head of Social Performance.

Right through the value chain, she says, runs the consciousness that company as a discretionary, luxury product, diamonds are uniquely exposed to reputational damage, as without consumer confidence that the diamonds they are buying have been mined, cut, and polished in an environmentally and socially responsible way demand will evaporate. “That’s why we established our Best Practice Principles (BPPs) Assurance Programme. Through this bespoke compliance programme, the social, environmental and ethical performance of our own operations and those of our customers is independently verified.

Uniquely within compliance programmes, De Beers asks our customers to meet these requirements as a condition of our supplying them.” Sightholders – customers who purchase rough diamonds from De Beers’ mines – have been required to comply with

Sorting diamonds at DTC Botswana

BE Mining | 143

Email: ronnie.van.der.nest@bw.atlascopco.com

DE BEERS GLOBAL OPERATIONS De Beers

ATLAS COPCO BOTSWANA Atlas Copco’s Mining and Rock Excavation Technique business area provides equipment for drilling and rock excavation, a complete range of related consumables and service through a global network.

Atlas Copco’s Construction Technique business area provides construction and demolition tools, portable compressors, pumps and generators, lighting towers, and compaction and paving equipment, all of which is supported through a global service network.

Atlas Copco’s Industrial Technique business area provides industrial power A leader in sustainable productivity solutions tools, assembly systems, quality assurance products, software and services.

Atlas Copco Botswana, a customer centre Atlas Copco Botswana was established within the Atlas Copco Group, is part of in 1969, and forms part of Atlas Copco’s an industrial group with world-leading Southern African business region. The positions in compressors, expanders and company operates from head office air treatment systems, construction and in Gaborone, as well as branches in mining equipment, power tools and assembly Francistown and Selebi Pikwe, and systems. With innovative products and currently employs 85 people. services, and in close cooperation with Atlas Copco Botswana is supported by customers and business partners, Atlas South Africa, which is the main hub for the Copco delivers solutions for sustainable Southern African region. A strengthened productivity. regional organisation means that customers The Group is organised into four separate, don’t only have access to Atlas Copco’s but still integrated business areas: world-class quality capital equipment, Atlas Copco’s Compressor Technique but also to related technical and support business area provides industrial services. In fact, even equipment operating compressors, gas and process compressors in extremely remote areas will be able to and expanders, air and gas treatment have the service excellence for which Atlas equipment and air management systems Copco is renowned. all of which are supported through a global service network. This business area also E. ronnie.van.der.nest@bw.atlascopco.com offers speciality rental services. www.atlascopco.com

WEEKLY| 145 |2 BEBEMining

De Beers

The trucks are lining up at the start of the shift ready to transport kimberlite ore to the primary crusher

BPPs since 2005. Contractors downstream trade behaves who derive 75 percent or properly is of existential importance to the business, more of their revenue from any De Beers Sightholder or De Beers does not lose business have participated sight of its need to operate Of all diamonds sold in the assurance programme sustainably and ethically worldwide are cut and since 2008. Other contractors at the government level. polished by De Beers have to sign a declaration of Diamonds are the bedrock Sightholders integrity stating that they are of economies such as those free of any material breaches of Namibia and Botswana, where De Beers has 50/50 Joint Venture of the BPP standards.

So far reaching is the programme that partnerships with the Governments, and today more than 330,000 people in the still a big contributor to that of South Africa diamond industry world-wide are covered where De Beers started. And wherever by it – between them, she adds, De Beers diamonds are mined they have a direct Sightholders cut and polish more than 60 impact on the surrounding community. percent of all diamonds sold worldwide.

Speaking as De Beers’ responsible However, while making sure the business lead, Dr Black is understandably

60%

BE Mining | 147

NEW PRECIOUS RESOURCE DISCOVERED

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

De Beers partisan, but her argument is compelling. “I believe our At Komatsu our vision has resulted in a proud heritage of partnership approach has technological success, and we are continuously evolving to been particularly powerful meet the needs of our customers. Our unique and advanced in supporting development. equipment provides our customers in South Africa and Certainly our Joint Venture world-wide with innovation and exceptional value. We partnerships with the understand the challenges our customers encounter in their business; that is why our construction, surface mining, governments of Botswana utility and process equipment is designed to meet the and Namibia speak for highest productivity, safety and environmental standards. themselves. Over the past www.komatsu.co.za 50 year Botswana has been the great success story of southern Africa and has turned its diamonds into lasting national wealth, with four out of every five dollars generated by our diamond related activities staying in the country.”

The Government of Botswana also holds a 15 percent stake in De Beers, in addition to its 50/50 Joint Venture partnership with De Beers in the diamond mining company Debswana. This partnership has helped transform an essentially agricultural economy into a nation with one of the highest economic growth rates in the world.

It is certainly true that the policy of establishing a downstream industry in southern Africa has been a great success.

Ten percent of all rough diamonds from Namibia, for example, being retained and sold locally to the 13 Sightholders that Forevermark Encordia bangle

komatsu

“I believe our partnership approach has been particularly powerful in supporting development” BE Mining | 149

Based in Cape Town,

ADP Group of Companies consists of ADP Holdings, ADP Marine and Modular, ADP Projects with ADP Namibia and ADPAfrica servicing the African continent.

ADP Projects specializes in providing Engineering, Procurement, Construction and Management (EPCM) services and EPC projects to the Mineral Industry with a small representative office in Johannesburg.

ADP Marine and Modular targets fit for purpose project execution requirements and smaller scale pre-engineered plant and technology supply to national and international marine and land based diamond, mineral sands, coal and gold mining industries.

ADP Marine and Modular also represents major European based Dredging and Marine Company Vosta LMG and is an equal partner with Denith Engineering in Under Water Mining Systems (UMS) a company focusing on the fast growing, niche marine mining market.

ADP Africa specializes in support services to mining companies in Africa that includes spares supply, logistics, meet and assist, visa applications and other general services to their client base.

PO BOX 514 PAARDEN EILAND 7420 CAPE TOWN Tel: +27 21 521 9400 Fax +27 21 521 9401 www.adpgroup.com

ADP started its operations in 1997 and boasts an impressive list of successful mining industry projects predominantly in Africa but including Canada, Brazil, India and Australia.

ADP is specifically structured as a group of companies in order to be able to optimally and cost effectively offer a full range of projects, consulting services and process plants to its clients, whether small or large, from conceptual studies and pre-engineered plants through to larger scale project execution using EPCM or Lump Sum contracting models. Our value proposition is assisting our clients to develop the optimal techno-economic solution for each project leveraging off our prior projects, technology and experienced innovative process engineering core..

De Beers

A view of the Venetia Diamond Mine open pit

have now set up indigenous companies that in the banking, hospitality and industrial currently employ at least 1,250 Namibians. sectors, he points out.

Now De Beers is really stepping up to its The move is taking place right now and principles by transferring a huge chunk of will be complete by the end of the year, its key HQ diamond sorting, valuation and making Gaborone a centre as important to the sales operations from London to Gaborone. diamond industry as London, Johannesburg “This is a bold move, I know,” says Bone, or Antwerp. The impact of De Beers’ activities “it is at the forefront of the move to foster on the other economies of southern Africa ‘resource nationalism’, and not without cannot be overemphasised. The $2 billion risk. But we think it is the right thing to it has announced it will spend on opening do. It will transfer a lot of underground workings at value to Botswana on top of its Venetia mine in South Africa, that country’s largest, what we have already done there in the past.” As well would prolong its life by as the hundreds of direct at least 20 years, during jobs being transferred, the which De Beers will devote People who work to move will act as a catalyst itself to creating sustainable BPP standard to other business activity alternative employment

300,000

BE Mining | 151

De Beers after the mine closes. One of the most effective ways it is doing this is through its involvement in the Zimele initiative. Started in 2008, Zimele’s programme focuses on those mining communities and impoverished areas that supply the De Beers workforce.

By encouraging the start-up of sustainable indigenous enterprises it aims to create 25,000 employment opportunities and 1,500 companies by 2015. “We have seven hubs, located near our operations in South Africa,” says Dr Black, “and we are currently looking at supporting similar initiatives in Namibia and Botswana as well.”

And stimulating economic development is far from the whole story. Sustainable initiatives generally include elements of education, environmental best practice, healthcare and conservation as well. Mining activities account for only a fifth of the area that is under lease to De Beers and a number of conservation and biodiversity projects have been started under The Diamond Route, a joint venture between De Beers, the Oppenheimer family and the black economic empowerment (BEE) company Ponahalo Holdings. Often these highly protected lease areas prove a haven for wildlife. “A good example is the Orapa mine in Botswana,” explains Andrew Bone. “A rhino conservation project was introduced at Orapa last year: now 15 rhinos are happily breeding there and it is remarkable programme.

For more information about De Beers visit: www.debeersgroup.com

BE Mining | 153

company in brief De Beers S.A. is the holding company of the De Beers mining interests around the world. It oversees De Beers Consolidated Mines (DBCM, mining, South Africa) and The Diamond Trading Company (DTC, diamond marketing, UK). It also controls the De Beers diamond mining interests such as 50% stakes in Debswana (with the government of Botswana) and Namdeb (with the government of Namibia), as well as mining interests in Canada, Congo, and India. At peak levels De Beers produces about 50 million

carats annually, mostly from its Debswana operations, the world’s highest producing mine.

De Beers is owned by South African resources giant Anglo American (85%) and the Botswana government (15%).

Board of Directors Philippe Mellier

René Médori

CEO, De Beers Group

Non-Executive Director

Brian Beamish

Gareth Mostyn

Non-Executive Director

Chief Financial Officer

Boikobo B. Paya

Barend Petersen

Non-Executive Director

Executive Director

Bruce Cleaver

Solomon Sekwakwa

Executive Director

Non-Executive Director

Kahijoro Kahuure

Peter Whitcutt

Non-Executive Director

Non-Executive Director

154 | BE Mining

de beers Mining Methods

mining operations

Each diamond deposit is different, which means our approach at each of our operations must be different - tailored to the geology and conditions we find. We use four different mining methods to access diamonds across of variety of geological conditions.

Botswana • Damtshaa • Orapa • Letlhakane • Jwaneng

South Africa • Venetia • Kimberley • Voorspoed • Namaqualand

Namibia • Atlantic 1 • Alluvial Contractors • Elizabeth Bay • Mining Area 1 • Orange River

Canada • Snap Lake • Victor

Mining Operations From our first South African mines our mining operations have spread into the diamond rich countries of the west coast of southern Africa and, half a world away, to the frozen tundra of Canada’s Northwest Territories.

Diamond Processing Processing diamondiferous ore and Diamond Value Management, the strategy that guides our operations, are inextricably linked. Both aim to maximise the value and life of our diamonds.

facts total Tonnes treated ’000 (2012) 52,340 Total Carats recovered ’000 (2012) 24,875

Office Mining Technology De Beers is the global leader in diamond technology. By investing in cutting edge research and development through our technology arm, DebTech, we are able to maximise the value and life of our resource.

De Beers Cornerstone Bldg, Cnr Diamond Dr. & Crownwood Rd., Theta Extension 4 Johannesburg, 2013, ZAF Tel: +27-11-374-7399 Fax: +27-11-374-5733 www.debeersgroup.com

BE Mining | 155

156 | BE Mining

Namibia Diamond Trading Company

Bright shining light Diamonds have an undeniable attraction that has made them sought after by collectors, connoisseurs, investors, and lovers: a key part of the economies of southern Africa they are so much more than just another resource mineral

written by: John O’Hanlon research by: Will Kirby BE Mining | 157

N

amibia Diamond Trading Company (NDTC) was established in 2007, to sort, value and sell diamonds produced by Namdeb (the joint venture responsible for mining activities in Namibia) and more specifically to establish a viable downstream diamond cutting, polishing and jewellery design industry in Namibia. In 2008 the man appointed as the new organisation’s chairman, then permanent secretary in the Ministry of Work, Transport and Communications, stepped into the leadership position of Chief Executive Officer at NDTC: in the subsequent six years Shihaleni Ndjaba has presided over the steady realisation of that goal.

NDTC is an equal partnership, or joint venture between the Government of Namibia and De Beers, the world’s leading diamond company with unrivalled expertise in the exploration, mining and marketing of diamonds, employing more than 23,000 people round the world. Its primary goal is to drive the growth of domestic diamond manufacturing industry and the creation of a sustainable downstream diamond industry in the country. The aim is to ensure the maximum, long term value from Namibian diamonds through world class sorting, valuing and sales practices in Namibia.

This strategy supports the development of new employment opportunities and a broadening of the skills base of Namibian citizens and will, it is hoped, encourage inward investment generally.

It has not been an easy time, he admits. The volatility in the international

158 | BE Mining

Namibia Diamond Trading Company

1,250 People employed by NDTC Sightholders

diamond market has affected the demand for jewellery, and as a consequence the demand for the rough diamonds traded by NDTC. You might have thought that wealthy people might think diamonds were a good investment at such a time, but the bulk of business activity is driven by consumption, not speculation, he believes.

But while waiting for green shoots to appear in the depressed global economy, things have gone really well for the diamond trade in Namibia itself. “One of our clearest objectives is to build up a vibrant and creative domestic beneficiation industry and here we have seen very satisfactory expansion,” says Ndjaba.

NDTC’s customers are called Sightholders – these are the suppliers of choice, selected in a rigorous process to determine their financial viability, technical capability and integrity.

They are appointed for three-year periods during which they have the right to buy diamonds offered to them by NDTC. Historically the centres of excellence in diamond polishing and cutting activities have been Belgium, Israel, India and New York. Now Namibia has its own group of Sightholders, incorporated in Namibia and employing an overwhelming majority of Namibians in their workshops. During the contract period that ended in 2012 there

160 | BE Mining

Namibia Diamond Trading Company

were twelve such companies in the portfolio, but in the three year period from 2013 to 2016 this has grown to 13. “Right now we have about 1,250 people employed by these 13 Sightholders,” he says, adding that out of a total population of around two million in Namibia and with 27 percent unemployment, that is quite an achievement.

There’s more. Though it is a highly skilled and creative industry, requiring a high level of craftsmanship as well as a great deal of creative and artistic flair, it is suitable for disadvantaged people who are keen

to learn new skills. Just to take one local Sightholder, Schachter & Namdar employs 160 people at its Windhoek factory, a third of them disabled, deaf or mute, modifying its polishing benches, installing handicapped restrooms and purchasing a modified minibus that accommodates wheelchairs.

So successful has this programme been that it has probably already reached its critical capacity. The number of diamonds being extracted in Namibia is not likely to increase. There have been no new discoveries on the land-based diamond

“One of our clearest objectives is to build up a vibrant and creative domestic beneficiation industry” BE Mining | 161

fields, which are approaching the end of their life. And while Namibia has become the world leader in marine diamond mining since it started exploiting the beaches and undersea resources that won’t last forever, Ndjaba warns. “Our task is to make sure the Sightholders we do have work hard, maintain those jobs, and transfer their skills

to local people so that one day, even if we are not able to supply them with diamonds, they will be able to source diamonds from elsewhere.” The industry will then be self-sustaining, with all the skills and equipment that it needs in place, and able to supply any shortfall in local materials from international sources.

“Our task is to make sure the Sightholders we do have work hard, maintain those jobs, and transfer their skills to local people”

162 | BE Mining

Namibia Diamond Trading Company

Turning NDTC into a fully for training in cutting and localised operation has been polishing but they need also largely thanks to the success to understand how to assess of its training academy. rough stones. “They learn Originally the company something of the geology Cut diamonds shown at relied on expatriates from and chemistry relating to Shining Light, Windhoek De Beers to evaluate and rough diamonds and that helps them understand the sort the rough diamonds it receives from Namdeb but now their assortment that we supply to them.”

As time goes on, he continues, the number has reduced as Namibians have acquired their skills. Now the academy Sightholder community is becoming fully offers courses to staff from the Ministry indigenised. No longer seen as a local branch of Mines and Energy, the office of the of an international entity, these companies Diamond Commissioner and to diamond are able to take part in the monthly ‘sights’ or inspectors to equip them with knowledge sales weeks that are held locally and where about the appearance and quality of rough they negotiate for all or part of the diamonds diamonds. It is also open to Sightholders they are offered. Namibia is after all a stable – they have their own specialist facilities and secure location to base an operation, and

14,000

BE Mining | 163

there is no reason the companies that set up here should be limited to Namibian diamonds for their raw material.

One of the most successful and high profile ways that NDTC has found to promote the industry and take ownership of its African roots is the bi-annual Shining Light Awards. At the launch of the third such event in Windhoek on 21 February 2013 the theme was the Women of Africa, Your Light Shines. More than 14,000 expertly cut diamonds were shown, set into locally designed jewellery pieces, including some from neighbouring Botswana. The overall winner was Erkki Hifindwako, a visual arts student at the Namibia College of the Arts, whose 18-carat white and yellow gold ring set with 575 brilliant cut diamonds took its inspiration from a traditional Namibian basket weave. He was sponsored by Sightholder Julius Klein Diamonds.

“Our African women need to be celebrated,” says Shihaleni Ndjaba. “It is a commonly known fact that a house without a mother is just a house, but a house with a woman is a home full of love and comfort!” The awards are a great showcase for the Namibian diamond industry, the Sightholders and the talented young designers like Hifindwako who are emerging. “Even at the height of the recession we saw no collapse of the industry, so I think we are in good shape to face the future,” he concludes.

For more information about Namibia Diamond Trading Company visit: www.debeersgroup.com

164 | BE Mining

Namibia Diamond Trading Company

company in brief The Diamond Trading Company (DTC) is the rough diamond distribution arm of De Beers, and is the world’s largest supplier of rough diamonds, by value.

With activities in sorting, valuing, sales and diamond beneficiation, the DTC is the bridge between De Beers’ rough diamond production and the DTC’s clients, known as Sightholders - who expertly add value at every stage of the diamond pipeline including dealing and preparing rough diamonds, manufacturing polished diamonds, designing and manufactoring

diamond jewellery and selling beautiful pieces at retail. DTC also sells natural rough diamonds to Industrial Sightholders for use in industry and healthcare.

Directors

Office

Philippe Mellier

Namibia Diamond Trading Company PO Box 23316, Windhoek, 9000

CEO, De Beers Group

Varda Shine CEO, Diamond Trading Company

Shihaleni Ndjaba CEO, NDTC

166 | BE Mining

Tel: +264 (0) 61 204 3222 Fax: +264 (0) 61 204 3263 www.debeersgroup.com www.dtcsightholder.com

namibia diamond trading company DTC principles

DTC operations

Passion For everything diamond

• DTC United Kingdom • DTC Botswana • DTC South Africa • Namibia DTC • Canadian Sights

Partnership Being united in purpose and actions with our partners and Sightholders Trust Being open in our dealings and listening to the ideas of others Community Ensuring we treat the people with whom we work and the communities in which we operate with respect, understanding and a clear appreciation of the consequences of our activities Future Continually seeking new ways in which to deliver beyond expectations – for partners, Sightholders and consumers

facts

1.3 million carats

Sorted and valued during 2011

13

Sightholders approved by NDTC

1,250

People employed by NDTC Sightholders

14,000

Cut diamonds shown at Shining Light, Windhoek

NDTC ownership Namibia Diamond Trading Company (NDTC) is a 50:50 joint venture between the Government of the Republic of Namibia (GRN) and De Beers and was formed in 2007 as part of a sorting, valuing and marketing agreement.

BE Mining | 167

168 | BE Mining

Resource Generation (Resgen)

A major coal resource for South Africa Though based in Australia Resource Generation (Resgen) is to all intents and purposes a South African coal mining company with a strong local partner and a huge stake in the future development of that nation

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

BE Mining | 169

Resource Generation (Resgen)

I

t is not hard to see why Resource 744.8 million tonnes of coal on just 34 Generation, a company listed on both percent of the holding, and sitting on a total the Australian and Johannesburg stock reserve of over six billion tonnes in all, the exchanges, was attracted to the Waterberg company is now very keen to get ahead and region of South Africa and in particular start constructing the mine, so that it can to the Boikarabelo coal mine which it has grow value for its shareholders and press been developing since 2008. The area, in the forward with its strategy to develop high north-east of South Africa close to the border grade energy related resources into viable with Botswana, is very accessible, and the and competitive mining operations. The quality of coal in the resource unrivalled.

South African mine is key to this, and the The Boikarabelo coal seam, between 120 project is now reaching a critical stage, with and 130 metres in depth, lies only 20 metres the exploration programme complete and all below the surface in terrain that is flat and major regulatory approvals obtained. Now easy to get at, so removal of the overburden Resgen is putting all its efforts into securing and the creation of an open pit the funding it needs. was an obvious and low cost Apart from the large solution to reach the seam, open pit, the mine will which contains a variety of have its own power plant, different types of coal, from overburden storage and coal thermal coal used in power handling and preparation Target for first stations and for which there is plant (CHPP). The CHPP coal production an insatiable demand within will crush, screen and grade the coal, stockpiling it into southern Africa itself, to soft coking coal for which there is a constant need two main categories. Coal for export will be to supply the steel producing nations of Asia, loaded onto rail trucks for transportation to where capacity is set to continue rising over the ports, while thermal coal for domestic use in the power generating stations of the coming decade.

The company’s holdings, covering 16,000 Eskom in Mpumalanga will be supplied hectares, are only 40 kilometres by road direct, also by rail. from the existing rail system that provides Coal is the major source of energy in access to domestic markets and to the ports South Africa. Production from existing of Maputo, Richards Bay and Durban for mines is limited and there is expected to be export shipments. These three ports all have an imbalance between supply and demand potential to expand their coal capacity, and over the next ten years. The Waterberg coal there is a proposal on the table for a new field contains approximately 40 percent of railway link with Walvis Bay in Namibia as South Africa’s remaining coal resource and is considered to be the main source of coal an alternative route to overseas markets.

Having declared a probable reserve of in the future.

2015

BE Mining | 171

ResourceRESOURCE Generation GENERATION (Resgen)

RSV ENCO CONSULTING (PTY) LTD

CEO, Alan Wingrove

Boikarabelo Coal Mine Project Resource Generation, a public company listed in Australia and South Africa, is a majority shareholder in Ledjadja Coal and is in the process of developing the Boikarabelo Coal Mine Project, a major project in the Waterberg Coal Field in the Limpopo Province, South Africa. The project comprises an open pit coal mine, supporting infrastructure including a 45km rail link, Coal Handling and Preparation Plant (CHPP) facilities, bulk water supply (local well field and supplemented by supply from Lephalale) and bulk electrical power supply via the national grid.

The open pit mine will be developed in a phased approach to support both the domestic and export markets. The run-of-mine production for the first six years of operation will be at a rate of some 14.8Mtpa, delivering 3.0Mtpa of export and 3.0Mtpa domestic product. Thereafter, the mine will be expanded to more than 30.0Mtpa run-of-mine production.

RSV ENCO Consulting (Pty) Ltd (“RSV ENCO�) has been involved in the development of the Boikarabelo project from the outset in November 2008 and has provided Ledjadja Coal with engineering design, procurement and project management services to date.

Construction management services will be provided when the project moves to implementation.

RSV ENCO is currently busy with detailed engineering design ahead of full project implementation go-ahead which is imminent, but subject to achieving financial closure. RSV ENCO is seeking appointment as the overall Managing Consultant responsible for delivery of the project; it is expected that the EPCM services contract will be finalised and awarded shortly. The CHPP will be delivered by others on an EPCM basis, with RSV ENCO monitoring safety and overall integration management.

The Rail Link detail design will be completed by others, but managed by RSV ENCO. In addition, RSV ENCO will be responsible for the management of the medical examination process for all contractor employees as well as the Safety, Health and Environment induction process on behalf of Ledjadja Coal prior to commencement of work on site. The RSV ENCO ISO 9001:2008 certified Quality Management System, which is aligned with the Project Management Body of Knowledge (PMBOK), will be fully implemented on the project. email. enco@rsvenco.com www.rsvenco.com

BEBEMining WEEKLY| 173 |2

We design for Africa Aveng Engineering & Projects Company provides comprehensive engineering design, procurement, construction management and outsourced operational services for multi-disciplinary engineering projects. Aveng Engineering focuses on the mineral processing and refining, power, energy and industrial markets, in Africa and internationally Come and talk to our team www.avenge-pc.co.za | www.aveng.co.za Building 30, The Woodlands, Woodlands Drive, Woodmead, Sandton, 2191* Private Bag x159, Rivonia 2128, South Africa.

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Providing Environmental and Social Solutions for the Coal Industry across Southern Africa

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DIGBY WELLS COAL CLIENTS FROM JUNIOR TO TIER 1 – WE UNDERSTAND OUR CLIENT’S NEEDS:

• RESOURCE GENERATION – Boikarabelo Project • ANGLO AMERICAN THERMAL COAL – Biodiversity Action / Management Plans • BHP BILLITON – Various ESIAs • EXXARO – Thabametsi • CIC ENERGY CORP. – Mmamabula Project

• NORTHERN COAL – Jaglust, Mimosa Colliery • CONTINENTAL COAL – Penumbra Coal Mine • UNIVERSAL COAL – Kangala, Brakfontein, Roodekop: ESIAs, IWULA and NEMWA • XSTRATA COAL SOUTH AFRICA – Various ESIAs, Specialist Services, Annual Closure Update AND MANY MORE ...

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Resource Generation (Resgen)

That is why a ten year haulage contract that Resgen’s local BEE subsidiary Ledjadja Coal signed in June last year with South Africa’s national rail transport company Transnet is so important. Transnet Freight Rail will be carrying up to four million tonnes of coal in the first year after production starts, rising

to five million tonnes in the second and continuing at an annual rate of six million tonnes. The agreement covers transport from the Waterburg to Witbank for Eskom and to the coal ports at Richards Bay and Durban for the export tonnage. “Finalisation of this Transnet contract has enabled us to progress

“This contract for domestic offtake now ensures revenue for Stage 1 of the Boikarabelo project is nearly fully underwritten” BE Mining | 175

RCE Consultants (Pty) Ltd is an independent railway and civil engineering consultancy with offices in Irene, Gauteng, South Africa.

The company was established with the aim of sustainably providing quality railway and civil engineering services, specializing in the planning, design, and project management of rail and port-related projects.

Specialist Services: • Port Engineering • Project tailored rail facilities • Railway Systems: Modelling and Simulations • Transport System Planning Railway and Civil Engineering Services: • Feasibility Studies • Project Management • Design Services • Railway Engineering Contact us: 0027 82 7769692 heinrich@rce-consultants.co.za

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Resource Generation (Resgen)

finance with banks, which have confirmed after production commences, linked to loan they are keen to provide funding,” said finance. This agreement opens the door to Resgen’s managing director Paul Jury. the funding for construction of the mine, If the Transnet deal was last year’s the CHPP and associated infrastructure, and detailed discussions with major milestone, this potential financiers of the year’s is undoubtedly the domestic offtake contract it mining equipment, materials announce on June 4. Under handling equipment, the rail this agreement the global line and project funding are all taking place in tandem, supply chain management said Jury: “This contract for company Noble Resources Coal contained in domestic offtake now ensures undertakes to purchase Resgen’s Waterburg three million tonnes of coal revenue for Stage 1 of the holding every year, for eight years Boikarabelo project is nearly

6 Billion tonnes

BE Mining | 177

“Finalisation of this Transnet contract has enabled us to progress finance with banks, which have confirmed they are keen to provide funding” fully underwritten. It provides certainty of cash flow generation further bolstering project value. It also highlights the tangible strategic value of the relationship with Noble.” Already regular logistics meetings are being held with TFR to plan the delivery of its haulage services once production starts at Boikarabelo. TFR is making good progress with the first upgrade works on the

178 | BE Mining

Thabazimbi line which will help to ensure initial capacity requirements are met.

Construction activities actually started in February this year with initial activities including the establishment of site infrastructure, roadworks and water and power connections. Tenders have been issued for longer lead time items, and now Stage 1 of the project is well under way,

Resource Generation (Resgen)

with first coal confidently expected in 2015. So many major hurdles have already been overcome. With a 30-year mining right, life-of-mine development consent for construction of the mine and rail link and integrated water use licence already out of the way, the TFR deal and the Noble coal offtake agreement complete the initial stage of preparedness for production. Other offtake deals will be available when the time is right, says Jury, however two are already in place, one with India’s third largest power utility the Calcutta Electric Supply Company and Bhushan Steel.

Project funding, progressing construction and getting the mine fleet in place are priorities for this year. The current reserve

of 744 million tonnes will keep the mine in production for decades, and with perhaps seven times as much again yet to be developed, this one mine will be enough to make Resource Generation into one of the world’s most significant coal producers and a strategic contributor to the south African economy. The company does have other development interests, notably its Cameroon uranium project. But the advanced and in many ways fail-safe Boikarabelo mine is in a league of its own.

For more information about Resource Generation (Resgen) visit: www.resgen.com.au

BE Mining | 179

company in brief Resource Generation Limited is an Australiabased company. The Company is engaged in the exploration and development of the Boikarabelo mine in the Waterberg region of South Africa.

The Company operates in two segments: Mining tenements and exploration, and Corporate. The Company has coal interests in South Africa and uranium tenements in Cameroon. The Company mainly focuses to develop its coal resources in the Waterberg region of South Africa. The Company operates in two geographical areas: Australia and South Africa. The Waterberg coal field contains approximately 40% of South Africa’s coal resource. In September 2011, it

sold its Tasmanian coal tenements. In June 2012, the Company signed a contract with Transnet Freight Rail (TFR). Its subsidiaries include Resgen Mauritius Limited, Resgen Africa Holdings Limited, Resgen Share Plan Pty Limited, Resgen Scrip Lending Pty Limited, Energy Investments Pty Limited, Tiger Coal Pty Limited, Uranex SA and Resgen South Africa (Pty) Ltd.

MANAGEMENT AND DIRECTORS Paul John Jury

Brendan O’Regan

Chief Executive Officer, Managing Director, Executive Director

Commercial and Financial Manager (South Africa)

Michelene Collopy

Brian David Warner

Chief Financial Officer

Non-Executive Chairman of the Board

Stephen James Matthews

Geoffrey Rose

Company Secretary, Finance Director, Executive Director

Non-Executive Director

Hennie Van den Aardweg General Manager - Operations (South Africa)

180 | BE Mining

Resource Generation (Resgen) stock watch

Office Corporate Office Level 12, Chifley Tower 2 Chifley Sq SYDNEY, NSW 2000 Australia Tel: +61-2-93769000 Fax: +61-2-93769013

Exchange ASX

Shares 569.40M

Symbol RES

Market Cap. 116.73M

Currency AUD

Div/yield -

investment highlights • Large quality shallow resource and reserve base • Simple cost effective mining operation in well understood coal jurisdiction •S ustainable production profile with longterm offtake secured • Defined pathway to first production • Infrastructure solutions in place •F ully BBE compliant/all relevant licences obtained

www.resgen.com.au

products • Coal • Uranium

operations • South Africa • Cameroon

Key stats and ratios

Q4 (Dec ‘12) Net profit margin -100.26% Operating margin -98.42% EBITD margin - Return on average assets -1.08% Return on average equity -1.14%

2012 -41.64% -41.40% -36.26% -0.62% -0.65%

Financial information from Google Finance and Thomson Reuters

BE Mining | 181

training the next generation From exploration to resource modelling, optimization, mine design, scheduling and financial modelling, our cutting edge software solutions enable users to rapidly generate robust scenarios in a secure governance framework

C

AE Mining provides a consulting team includes over 120 compelling one-stop- experienced geologists and mining shop for the technology engineers, servicing client needs such and services required as managing exploration drilling to seamlessly plan programs, mining studies, resource and manage modern mining evaluation, on-site technical services operations. With operations in and business improvement projects.

Our C A E Terra twelve countries, CAE mining equipment Mining offers solutions simulators, developed for mine planning, and launc hed in mine operations and operator training. fiscal 2012, leverage Number of countries Our mine planning our experience in in which CAE and operations simulation to provide have customers products are used for an unrivalled level of realism. Our simulators managing exploration and geological data, mine strategy, are integrated with a comprehensive optimization, detailed design and student management system, lesson scheduling, fleet dispatch and remote planning tools and interactive management for all mining methods touch panel instructor station. Our and commodities. Complementing training services include workforce this technology, our technical development planning, training needs

90+

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CAE Mining

analysis, professional development in technical disciplines and the design and implementation of operator training curriculum. Our operator training courseware is designed for multiple delivery modes including self-paced e-learning, instructorled classroom training, procedural training and scenarios delivered in our high fidelity simulators.

We have customers in over 90 countries that are supported by our offices in Australia, Brazil, Canada, Chile, Columbia, India, Kazakhstan, Mexico, Peru, South Africa, the U.S.

and the U.K. We provide products and services for open pit and underground operations to mining organizations, from large diversified miners to junior miners and consultancies.

CAE Mining 3200 Guenette Saint-Laurent, Quebec H4S 2G5 Canada T +1 514 341 2000 E caemining@cae.com www.cae.com/mining

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DO YOU NEED SULFUR DIOXIDE FOR YOUR MINE SITE?

Chemithon offers pressurized sulfur burners for use in making SO2 gas for cyanide destruction in gold tailings, recovery of silver from manganiferous silver ores, and SO2/air mixtures for oxidation of leach

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he Chemithon Corporation has over 58 years of experience in providing sulfur related chemical process technology, R&D, engineering, design, process equipment manufacturing and a full range of services to its customers. Chemithon is committed to developing new and innovative technologies and equipment for use in producing SO2 and/or SO3 to meet the chemical demands required by modern day mining operations.

Because sulfur is relatively inexpensive, a pressurized sulfur burner is the most cost effective way of

“ Chemithon offers custom engineered systems designed to meet the specific requirements of a mine site�

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getting SO2 gas to cyanide destruction or oxidation tanks at a mine site.

Chemithon sulfur burning SO2 and SO3 plants can be configured to operate with either compressed air or an oxygen plant to burn sulfur at a pressure high enough to bubble the gas through a reaction tank filled with ore slurry.

The pressurized SO2 gas can be delivered via a pipeline to the reaction tank(s).

Depending on the process requirements the gas can be supplied either hot or cold (50 to 700°C) and at a wide range of concentrations (zero to nearly pure SO2). For sulfur burning processes that utilize oxygen, the excess oxygen required by the process can be delivered to the tanks through the same pipe line.

The SO2 gas supply pressure depends on the specific design of the process with the typical delivery pressure being in the range of 2 to 5 Barg. If desired, Chemithon can supply a plant to make

Chemithon Corporation

liquid SO2 which could be either used immediately or stored for later use.

Capacity of the Chemithon sulfur burners typically range from 15 to 100 metric tons per day of SO2, but lower and high capacities are achievable.

Sulfur can be supplied as solid prills or granules, which require a sulfur melter, or as molten sulfur (depends on local availability). Chemithon offers custom engineered systems designed to meet the specific requirements of a mine site. The sulfur supply system can be equipped for bulk bags of solid sulfur (prills or granules) or unloading of molten sulfur from either rail car or tank truck. If necessary, a sulfur filtration system can be provided for treating and cleaning poor quality sulfur.

For sulfur burning systems using compressed air Chemithon offers high quality screw type compressors in either a variable or fixed speed configuration

or a combination of both for fine tuning and optimizing the system operation and performance allowing for significant operating cost saving when operating at reduced sulfur burning rates.

The oxygen used in the Chemithon sulfur burning plants can be from a liquid oxygen storage tank or a VPSA oxygen system.

In addition to offering plants for supply of SO2 gas, Chemithon offers unique and compact plants for making liquid SO3 from sulfur and oxygen or via the more conventional acid plant using the well established oleum absorption and boiling process.

Chemithon Corporation T (206) 937-9954 Email: chemoffice@chemithon.com www.chemithon.com

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leading consultancy We at EPSA-LABCO apply our experience and knowledge, each partner maintains a strong commitment to provide value and added service in order to always keep customer satisfaction

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PSA-LABCO, Consulting Engineers, Inc. is a prominent consulting firm, supervision and project management with over twenty years of professional experience, founded on June 20, 1985, through the merger of the following engineering consulting firms: EPSA studies, projects, supervision and auditing, established in 1984, owned by Mr. Manuel GómezAchecar, Ph.D.

“ We use top experts to ensure the excellence of our services, we lead by example and we work together.”

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LABCO: Laboratory of Soil and Building Materials, founded in 1963, property of the late Joseph Ordeix, MSCE, combining between them, nearly half a century of good engineering practice. EPSA-LABCO was created with the vision of providing high quality professional services in various areas of civil engineering, such as: • Architecture & Engineering • Procurement & Logistics • Construction Management & Supervision • Project Control & Budgets • Laboratory • Quality Assurance We are dedicated to providing practical solutions to issues of stability of geological structures. These solutions are aimed at design and evaluation, and support during the construction process.

EPSA-LABCO

We have solid experience in geotechnical services based on our professional high technical capability to provide the desired excellence in our consulting services. With our extensive experience, combined with expertise in complex geo-mechanical analysis and the use of computers and sophisticated software.

He has had the opportunity to participate in the design of various types of projects: Slope Stabilization,

shallow and deep foundations, Soil Improvement, roads, bridges, dams, canals, and other buildings.

EPSA-LABCO Socorro Sรกnchez #57 Gazcue, Santo Domingo, D.N. T (809) 221-3772 www.epsalabco.com

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reliable construction Serving our customers since 1933, we became the oldest and largest construction company in Peru

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e have developed, over our history, countles projects in all sectors of construction: Infrastructure, Energy, Building, Mining, Oil, Industry, among others.

In the course of the various projects we have partnered with leading construction companies in the world, such as Bechtel, Fluor, Dumez GTM (Vinci), Aker Solutions, among others.

For the convenience of our customers, we have developed projects

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in various forms, with or without financing, turnkey (turn-key), EPC (Engineering, Procurement and Construction), among others.

Gym offers its services to all companies in the country and the rest of Latin America, making available to its customers, a team of professionals and highly skilled technicians and experienced.

We have a fleet of latest equipment, which has the highest standards of maintenance. We are a leading company that certifies compliance with all of its projects “ahead of schedule” with the quality and reliability our customers require.

Our mission is to meet the needs of engineering and infrastructure services to its customers beyond contractual obligations, working in an environment that motivates and develops staff while respecting the environment in harmony with the

Gym

communities in which it operates and ensuring the return to its shareholders.

As part of our corporate identity, vision, mission and values, the Corporation entered some years to a stage where social responsibility is formally inserted in the development of our operations.

Our Letter of Ethics, signed in 1995, the Health and Safety policy in 1999 and the Environmental Policy in 1998 are part of this process and have made a clear pattern of behavior towards customers, shareholders, staff and community.

This socially responsible behavior, has, on the home front, as the main target group for our staff, and on the external front the audiences that make up the community with which we relate to the development of our operations.

GYM 4675 Paseo La Republica, Lima 34, Peru.

T 51 (1) 213-0444 www.gym.com.pe

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GLOBAL LEADER IN INNOVATION Martin Engineering is committed to safety, excellence and innovation in bulk-materials handling

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stablished in 1944, Martin Engineering is the leading international developer, manufacturer and supplier of innovations to make the handling of bulk materials cleaner, safer and more productive. Martin offers technologies that boost flow, reduce dust and spillage, extend component life and reduce downtime, resulting in improved operating environments and increased profitability.

Our Global Team of experts from every part of the world, work together to produce and manufacture high quality products that deserve the Martin seal of approval. Our service technicians average 27 years of experience in bulk material handling. Our product engineers and development teams work side by side with our sales and service leaders to share innovative ideas within our corporate community

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around the globe and to help facilitate the development of new products that make bulk material handling cleaner, safer and more productive worldwide.

This experience and expertise made Martin Engineering the leader in bulk material handling solutions.

Martin Engineering has a reputation for high-quality products and skilled, dedicated employees. But more importantly, we have a reputation for partnering with our customers to develop solutions that best suit their problems and make their jobs easier.

Our Certified Conveyor Technicians are in the field working side by side with our customers and see firsthand what the issues are and how best to provide the solutions for their individual problem.

Because we work so closely with our customers, we know firsthand what the problems are, not just by industry but

MARTIN ENGINEERING

by individual plant. Our technicians then provide this information to our Product and Development team who work continuously developing new technologies that enhance and improve our current products while always thinking ahead to develop advanced technologies that will provide new solutions.

Developing strong relationships with our customers is the only way to maintain that knowledge base which continues to feed innovation in Research and Development and provide unique, practical solutions to age-old problems.

Martin E n g i ne e r i n g is headquartered in Neponset, IL with business locations include Mexico, Brazil, China, France, Germany, United Kingdom, South Africa, Turkey, Indonesia, India, Canada, Australia, Japan, Chile and Colombia.

Problem Solved.™ Martin Engineering Corporate Headquarters Neponset, IL, USA 61345 T 800-544-2947 www.martin-eng.com

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

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

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