Mining Quarterly Fall 2017

Q

UARTERLY

Fall 2017

Klondex deeds land to tribe Sacred site for next generation

INSIDE: Abandoned mines — Page 36 | NvMA safety winners — Page 11 | Coeur Rochester celebrates pour — Page 30

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FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 3

FEATURED CONTENTS COVER STORY

JOE HOLLEY

Klondex deeds land Western Shoshone secure sacred site Page 5

Mine safety awards NvMA announces winners Safety award winner Q&A Winners highlighted

Page 11 Page 12 Page 17

Coeur mine celebrates 150 millionth ounce poured

Page 30

Abandoned Mine Lands Program looks back on 30 years Page 36

Tribal youth days Barrick supports career, culture Page 43

ON THE COVER Raiden Sam, 8, marches in Aug. 18 with fellow Western Shoshone tribal members on horses to celebrate Klondex Mines Ltd. deeding ancient sacred land back to the tribe.

Photo by Suzanne Featherston More contents • Page 4

T

A new chapter of Mining Quarterly

he Bluestone Mine, Anaconda Copper Mine, Pine Grove and Virginia City formed my first impressions of the Nevada mining industry. Those sites are within a day’s drive of Yerington, where I grew up, and I explored them with family and friends.

I remember looking at the ghost towns, mine workings and museum exhibits, letting my imagination fill in the scenes around ruins, tailings, pits, portals and artifacts. What I did not imagine was returning to my home state after 11 years in Texas to write SUZANNE FEATHERSTON about the thriving Nevada mining industry.

As the new editor of Mining Quarterly, appointed July 17, I take on a publication started 20 years ago by the former Elko Daily Free Press owner, the Steninger family, carried on by Adella Harding, and most recently managed by Marianne Kobak McKown. I hope to build on their legacy while expounding on stories of mining in Nevada and beyond.

With a journalism degree from the University of Texas at Austin, I offer nearly 10 years of experience covering business, government and the energy industry through regional and statewide publications in Texas.

Although some of the skills and observations from the past will inform this job, I understand that I am a student in a new field.

Already, I have been a student of safety, having taken the 24-hour New Miner Surface Part 48 Mine Safety training course so I can safely visit mine sites to learn about operations. Read about how trainer Dave Heath conducts the course at Porter Merrill Safety Training Services in Elko on Page 24.

Safety is the incidental theme of the fall Mining Quarterly. The topic, made timely as the Nevada Mining Association honors its Safety Award winners at its September convention, provides a subject around which all mine leaders and employees can rally. Q&As and briefs included in this issue acknowledge the careful work of several individual award winners while additional articles cover the Safety Olympiad and Safety Summit.

Unlike my experiences exploring mines of yesteryear, I will no longer have to project my imagination on old mine sites. I want to partner with you — the force behind and around the mining industry — to better understand and portray modern mining through feet-on-the ground reporting and photography, and attentive editing.

As we open a new chapter of Mining Quarterly, please feel free to contact me with ideas, suggestions and constructive criticism. You can reach me at 775-748-2715 or sfeatherston@elkodaily.com.

Best regards, Suzanne Featherston Editor

4 • MINING QUARTERLY, Elko, Nevada FALL 2017

CONTENTS

FEATURES

Mine safety course opens eyes to the unexpected

Page 24‌

Zero harm summit focus

Page 26‌

People of Mines

Page 32‌

Priest Electric serves mining industry in Nevada

Page 50‌

Mines perform drilling rig rescue

NV on EPA proposal

Page 54‌

State: Defer Anaconda mine priority listing

Page 55‌

Industry Ingots

Page 56‌

Barrick second quarter report

Page 58‌

Comstock Mining reports lower costs

Page 62‌

Newmont reports net income

Page 64‌

Page 28‌

UNR at mine comp Page 34‌

COLUMNISTS‌ NvMa introduces 4 safety winners

Page 20‌

Boyce: Practice what you preach

Page 67‌

Dobra: Gold investment myths

Page 69‌

Baker: A tectonic shift in markets?

Page 72‌

ONLINE EXTRAS Look for videos and photo galleries at elkodaily.com.

MINING QUARTERLY ‌ ravis Quast: Publisher T Suzanne Featherston: Editor Nancy Streets: Advertising Director To advertise, call 775-738-3118.

Mining Quarterly is published in March, June, September and December by the Elko Daily Free Press (USPS No. 173-4320) at 3720 Idaho St., Elko, Nevada 89801, by Lee Publications Inc., a subsidiary of Lee Enterprises. Periodical postage paid at the Elko Post Office. For change of address, write 3720 Idaho St., Elko NV 89801.

Remembering American Canyon

Page 41‌

GeoTemps sees job growth

Page 47‌

FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 5

Klondex deeds land to Western Shoshone SUZANNE FEATHERSTON sfeatherston@elkodaily.com‌

‌M ore than 3,200 acres returned to Western Shoshone as Klondex Mines Ltd. transferred the deed for five parcels, including their sacred Rock Creek lands northeast of Battle Mountain, to the tribes Aug. 17.

“We are delighted — we are all delighted — that we’re receiving the land that really is Shoshone land, and we’re grateful,” said Naomi Mason, a Western Shoshone elder from the Duck Valley Indian Reservation, at a donation celebration in Battle Mountain on Aug. 18. “The elders persisted, and so here we are.”

This landmark donation from a mining company to Nevada’s indigenous people reflects the modern mining industry’s emphasis on being good neighbors, said Nevada Mining Association President Dana Bennett.

“In particular, Northern Nevada mining companies are collaborating with local Native Americans in a number of programs and projects,” she said, “and the Klondex-Western Shoshone land transfer is a marvelous demonstration of this industry’s commitment to community engagement.”

The long process, however, was fraught with challenges.

“It is quite emotional for me because it took so long. It took such a long time for us to get here, and the things that we overcame to get here are pretty powerful,” said Paul Huet, president and CEO of Klondex. “So it was definitely meant to happen when I think about all the events that have occurred.”

Powers

The transaction took almost a decade, with the idea springing from when Huet was the general manager of Great Basin See Klondex, 6

SUZANNE FEATHERSTON

Klondex Mine Ltd. liason to the Western Shoshone Joe Holley and grandson Wambli, 3, wearing traditional regalia, ride a horse into the into the Rock Creek Lands donation celebration Aug. 18. Tribal members say they want to preserve the sacred land for the next generation.

6 • MINING QUARTERLY, Elko, Nevada Fall 2017

Klondex From 5

Gold Ltd. at the Hollister Gold Mine, about 40 miles from the Rock Creek lands. There, on site tours in 2008, Western Shoshone elders expressed how the site is sacred to the indigenous people. Huet also visited the mouth of the canyon to view Eagle Rock, a focal point in the cultural landscape.

“The first and second time I went there, I couldn’t believe such an area existed in the middle of Nevada,” Huet said. “It’s a beautiful spot.”

Historically, Rock Creek and the surrounding landscape was instrumental in boys’ transition to manhood on what one today might call “vision quests,” was a place of healing and more.

Ancestors used the white chert found there to make arrowheads, giving rise to the name Tosawihi Quarry. “Tosawihi, pronounced “doe-sah-wee-hee,” means “white knife.” The Western Shoshone still use the land today and say it is spiritual.

Ted Thomas, attending the event from Owyhee, compared the land to a church. Other tribal members from Battle Mountain discussed what it is like to visit Rock Creek.

“There’s things you feel out there that you don’t feel anywhere else, if you’re open to it,” said Clifton Oppenhein. “I get chills walking out there. Goosebumps.”

“There’s powers out there,” Rhonda Hicks said.

“Strong powers, too,” added Sally C. Knight.

“We listened”

Perhaps conversations like this and visiting the site made it clear to Huet that the Rock Creek lands had deep meaning to the Western Shoshone.

“What we did back then, very importantly, was we listened,” Huet said, “and we still listen to the elders.”

Huet sought out who owned the Rock Creek lands with the intention of buying them to donate back to the Western Shoshone. Fundraising for the asking

price of more than $800,000 in 2009 through negotiations with Great Basin Gold directors in South Africa and Canada led to a tentative agreement to purchase the land from a real estate holding group. Before the deal could be completed, however, Huet went to work for another company, and Great Basin Gold went bankrupt.

“As a result, the Rock Creek lands fell victim of this bankruptcy,” Huet said.

A tumultuous 10 or so years followed. The land changed ownership. The Hollister mine operated at times without respect for the indigenous people. Lawsuits were filed.

“The experience I’ve had with previous owners has been very, very bad,” said Tanya Reynolds, the South Fork representative on the Tosawihi Quarry working group in an Aug. 14 phone interview. “We were after a collaborative partnership [with previous owners], but instead, they saw us as a roadblock and refused to work with us.”

SUZANNE FEATHERSTON

Paul Huet, Klondex Mines Ltd. president and CEO, said Aug. 18 that donating the Rock Creek lands back to the Western Shoshone “will be one of the cherished and prized moments of my life that I’ve ever been part of with an amazing group. Something meaningful, something that will change the course of history and secure lands indefinitely for the Western Shoshone.”

New ownership

Change came after Huet became the president and CEO of Canada-based Klondex in 2012. Four years later, the company purchased Hollister and Rock Creek lands from another Canadian mining company, Waterton Global Resources, which had laid off most of the mine’s employees and reduced it to care-and-maintenance status earlier in 2016. In addition to wanting to mine Hollister, Huet intended to finish what he started for the Western Shoshone almost a decade earlier.

“It’s really Paul wanting to be different and doing something that no other mining company has done,” said John Seaberg, senior vice president of strategic relations in a July 31 phone interview. “We want to finish the work that he started at Great Basin Gold. We want to be an example to the mining community and the mining industry of how the local communities and the native communities and JOE JOLLEY‌

See Klondex, 8

The Rock Creek lands are about 20 miles northeast of Battle Mountain.

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8 • MINING QUARTERLY, Elko, Nevada FALL 2017 Mountain Band Tribal Council and now works for Klondex as a liaison to the Western Shoshone.

He previously worked about 18 years for Barrick Gold Corp.

“Everybody, all the elders I’ve spoken with, say it’s a good thing,” Reynolds said. “That’s about as much as you’re going to get from an elder native. It’s a good thing.”

And that’s high praise, she said.

Klondex From 6

mining companies can really collaborate and form a partnership and coexist, if you will, in a peaceful way.”

Lucy Hill, director of environmental services and community relations with Klondex, said the Western Shoshone continue to visit the mine and offer advice.

“They are very engaged at what we do at Hollister,” she said, “and we make sure we are very aware of what their needs are.”

Reynolds said she notices the difference, citing how Klondex invited her to visit with drillers. The drillers said they could avoid disturbing the sacred surfaces by drilling down to the target at an angle. “So far, Klondex has been really open to working us,” Reynolds said. “It has actually been a really good working relationship.”

Crowning that relationship was the mid-August signing over of

“We’re still here” SUZANNE FEATHERSTON

Reggie Sope, Western Shoshone spiritual leader, rides into the Rock Creek Lands donation celebration Aug. 18 on horseback. the deed and celebration, attended by tribal members from all four Western Shoshone bands, Klondex board chairman Ritch Hall and special guests, including U.S. Rep. Mark Amodei and Nevada Assemblyman Ira Hansen.

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“There is a lot to be learned here today simply by what Paul has done by giving back parts of the land. It’s a really important day for us,” said event emcee Joe Holley, a Western Shoshone member.

Holley has chaired the Battle

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Yet the Western Shoshone remember the recent and ancient history, and say they will keep a close watch over operations around their land so it’s intact or in even better shape for the next generation.

“Rock Creek is a part of Tosawihi Quarry. It’s not separate. It’s a part of the larger picture of the area,” said Ted Howard, chairman of the Duck

See Klondex, 10

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Klondex From 8

Valley Western Shoshone-Paiute tribe, one of the four band councils represented at the Aug. 18 event. “Our sites are referred to as prehistoric. We don’t have a prehistory. We have one continuous history. And we’re still here.”

Speaking from a podium, Howard thanked Huet but expressed concern over mining operations in the general area, saying he hoped it would one day cease. “Sometimes that is difficult to do because of the hunger for money,” he said. “To [our] people, some things are sacred.

There’s no amount of money that could justify the destruction of these places, and that’s the way it is with the Tosawihi Quarry. No matter what you do, there is no money that could replace that.”

Klondex plans to mine underground at the fully permitted Hollister mine, Hill said, to lessen the impact on the sacred surface.

The mineral rights to four private

parcels out of the five donated have been retired, Hill said; now with that land under Western Shoshone ownership, it is unlikely to ever be mined again.

Klondex set up and donated to a conservancy to prevent development on those four parcels. The fifth parcel, which is on private land, still has mineral rights.

Limited development could be allowed with Western Shoshone consent on the fifth parcel.

“We are so thankful that it has happened,” Reynolds said. “We are still going to be watching, and we are still going to oppose things if we need to. They do have the understanding that this is a cooperative effort. We are not there to put up stone walls.

We are just trying to benefit our people as much as we can. … We cross our fingers, and we keep praying that things work as well as they have been with Klondex.”

In the meantime, the bands celebrated Aug. 18. Members rode into the ceremony on horseback, just as their warriors did in days past, Holley

SUZANNE FEATHERSTON

Western Shoshone elder Naomi Mason credits the persistence of the elders for bringing the Rock Creek lands back to the people, as Joe Holley looks on. explained, connected to Earth through the animal. Some wore traditional regalia — including feathered and porcupine hair headdresses, and breastplates of bullet shells or bones — and danced with bells on to a drumbeat that Holley said represents the heartbeat of the people.

They filled the day with song and prayer.

“It’s a long time coming,” said Raymond Yowell, a Western Shoshone elder from South Fork.

“It’s a good thing.”

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FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 11

Mine safety awards ADELLA HARDING Mining Quarterly correspondent‌

‌The Nevada Mining Association announced the winners of the 2017 Safety Awards that will be presented at the association’s convention at Lake Tahoe on Sept. 9, including Keith Jones of Small Mine Development as winner of the general manager honors.

Jones is general manager of all SMD operations and works out of the Boise-based company’s Battle Mountain shop.

SMD specializes in underground mine development and contract mining.

First-place safety honors for large surface mines go to Newmont Mining Corp.’s South Area operations north of Carlin, and Coeur Mining Inc.’s Rochester Mine near Lovelock won first place in the medium category. Rye Patch Gold’s Florida Canyon Mine took first place in the small-mine category.

For underground mines, Barrick Nevada’s Cortez Underground operations between Carlin and Battle Mountain took first place for the large mines, while Klondex Mines Ltd. won first place for its Midas Mine near the historic town of Midas.

Newmont’s Chukar Mine north of Carlin won for small underground mines.

“Safety continues to be the No. 1 priority for Nevada mining companies and employees,” Dana Bennett, president of the mining association, said in an

announcement July 5.

“We received an unprecedented number of individual nominations and will also be presenting several Sentinel of Safety awards to operators with zero reportable injuries in 2016,” she said.

The association plans to give 30 awards to mine operators and 42 awards to individuals at the mining convention, which will be Sept. 6-9 at Harrah’s Lake Tahoe.

Patricia Silvey, deputy assistant secretary for operations for the U.S. Mine Safety and Health Administration, is scheduled to speak at the awards presentation that begins at noon at Harrah’s on Sept. 9.

The mining association gives the safety awards each year to mine operations and individual mining employees, basing the 2017 awards on data from 2016.

Operator awards go to the top three mines in designated categories based on their safety rate, which the association calculates factoring in the number of employees on-site, the number of man-hours for the year, and penalties for lost-time accidents, number of reportable incidents and lost-time days.

Individual awards are based on nominations only, and nominees are judged on their personal safety records and involvement in advocating safety in the workplace.

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Safety Award Winner Q&A Individual winners share safety culture

people out there doing good things, so it’s a real honor.

SUZANNE FEATHERSTON

How does the safety culture for a contractor compare to those at other mining companies?

It’s similar. All of us have the same goal of everybody going home at the end of a shift safe and uninjured. How we go about doing that may be a little bit different in execution — maybe that’s not a good word to use. I think we all have a little bit different way in how we actually try to meet that goal, but it’s the same focus basically.

sfeatherston@elkodaily.com‌

‌ MD general manager S stresses importance of setting examples

Ke i t h Jo n e s h a s b e e n t h e general manager of Small Mine Development since 2010. The Idaho-based mining contractor formed in 1982 and works five active mine sites in Nevada plus one in Colorado. Jones is the first SMD general manager to win the How would you describe your Nevada Mining Association’s general company’s safety culture? manager award.

We embarked with Newmont on what they call the Safety Journey back What does it mean to you to win in 2011. I really believe that the safety the Nevada Mining Association’s culture is a journey. That journey, as SMALL MINE DEVELOPMENT‌ they describe it, is anything from an general manager award?

Keith Jones, general manager of Small Mine It is an honor. The competition awareness situation to where safety Development is very stiff. There is a lot of good is more of an afterthought and not

FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 13 core to your business to fully integrated where everything you do is viewed through the lens of safety and trying to do things the right way and the safe way.

I believe as individuals and as companies and as sites and as crews, I think that journey is a continual process, and I think that at any given moment in time, depending on what is going on around us, we are at any one of those five stages in this journey as it’s described in the Safety Journey model. By that I mean that we can feel that we are at the top of our game, that we are fully integrated and are the safest person in the world, but at the moment that we are driving and look at our phone to check a text message or are distracted turning the radio, or any number of things, we’ve slid right back to an awareness level. I think that process is going on continually.

I think overall we do improve and that our culture improves and our employees fundamentally understand where we are trying to go. But all of us go back and forth in where we’re at on this journey.

If you’re honest with yourself and you really think about what you do in your life (by you, I mean each one of us), I think you can come to that realization that you go to change a light bulb at home and the step stool is not handy so you stand on a chair, if you’re truly honest and you evaluate what all of us do at any point in time, I think you can really understand that that is a constant battle and it is always in a state of flux. Unfortunately, it takes that one split second that you make that wrong choice; that’s when it happens.

Leading by example. We can talk until we are blue in the face, and we can preach and scream and yell or any number of things, but the moment that we say we want everybody to obey the speed limit on the highway, and then we pass someone ignoring that speed limit ourselves, we’ve lost the battle.

Who was most influential in shaping your career and why?

I used to work for Echo Bay Minerals out of McCoy Cove operation [in Lander County], and I used to work for a general manager, his name was John van de Bueken, and he always challenged us to do our best and really believed in safety and he walked the talk, led by example.

I remember at one point in time, How does a manager influence I was thinking about, he moved a company’s safety culture? on to a different company, and

I was thinking about moving on to a different company and the company I was looking at had a really poor safety record and I had mentioned that to him, and I viewed that as a concern and maybe a reason not to go, and he says, “Well, you can be part of the problem, or you can be part of the solution. If you go in with the attitude that you’re going to try to make it better, then you can actually make a difference and improve the safety record.” That’s always stuck with me.

What made you decide to get into mining?

I had family ties. Way back, my grandfather was a gold miner up in Idaho, and my dad was involved in various aspects so it was something that was an interest to me.

See Q&A, 14

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Q&A From 13

How and when did you become the general manager of SMD? Ron Guill, the former owner, was trying to slow down a little bit and groom his successors, if you will, so he moved me into general manager in 2010. [Before that], I was one of the projects managers for SMD.

Newmont safety manager says success is a journey Tim Burns, health and safety manager for Newmont Mining Corp.’s Carlin Surface Mine, has worked for Newmont for more than 22 years. He has experience as a mine engineer and took lessons on safety from a survivor of Idaho’s 1972 Sunshine Mine fire, which led to the creation of the Mine Safety and Health Administration.

Burns credits his family, particularly his father, for influencing his career choice in mining.

If you could spend a day with one person, who would it be and why?

It would probably be my wife because we don’t get too many days that we stick together. It’s busyness, family, and so on and so forth. Time What does it mean to you to win with family is precious. the Nevada Mining Association’s safety manager award?

This award is a little difficult for me What advice would you give a new manager regarding safety? just because it’s been given to me, but It would be back to leading by I feel like there are so many people that example. You have to show the folks are driving me to improve the perforthat you’re waking the talk and doing mance that we’ve had. It takes that the best you can to live up to the stan- village to be successful, not any one dard that you want. individual. …

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FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 15 wrong direction. We track our reportable injuries quite closely, and we’ve seen a steady decline.

The other thing is, if we have any injury, it’s really thought of as one too many. … Over the years and through this process, it’s that recognition of, you can let these things happen and do nothing about them until it gets out of control, or you can try to get in front of them and start to put programs in place. …

We are at the point now with our performance it’s quite difficult. The better you get, the harder it is to get better. What we are looking for is perfection, and that’s a pretty tough ruler to You mentioned the Safety measure yourself against. But if Journey program. When did you don’t measure it, you don’t you implement that? tend to improve.

We started the process probably 10 years ago, when we were Who was most influential looking at benchmarking other in shaping your career companies that were successful and why? to see what kind of things they That’s probably a lot of peodid. One of the big things was ple, as well. My dad shaped a big just measuring, having a tool to part of who I am. When I first measure that culture. We put a made the transition into health lot of time and work into devel- and safety, an individual that I oping that. That wasn’t me. This worked for — Bob Launhardt — was the entire corporate and he was the safety engineer when inside health and safety teams they had the disaster at the Sunthat helped put this together. … shine Mine. When I started to We started to roll that out orig- work for him, he had me review inally to the management teams all the depositions from that at a high level with the idea that disaster. At the time, I didn’t those management teams would understand why I was doing train their folks at the sites and that. … Having been in safety a then eventually take that mes- long time now, I think what he sage down to the hourly group. was trying to drive in me was the … That’s when the program importance of the decisions we really started to take hold, and make … and what a huge impact we started to see the improve- it can actually have if you don’t make the right calls. He was the ments building. first individual that introduced How would you describe your me to the health and safety side company’s safety culture? of things. …

For us, it really is a journey; It changed [Launhardt’s] there isn’t an expectation that life, and his whole method was we are necessarily ever going to try and shape mine without to get there. Our feeling is that having to go through a disaster about the time you are getting like that. comfortable, things are going well, that’s when you go on the See Q&A, 16 When we started down the Safety Journey process, it was about improving safety culture and what would it take for us to get there. We had a lot of ideas, but to see those ideas actually start happening — with management team taking ownership of safety and taking responsibility for both the good and the bad, then allowing the hourly folks to get involved to the extent they have — that part is more rewarding than the actual award part of it for me: to see that transition actually taking place through the hard work of the management team and the employees.

16 • MINING QUARTERLY, Elko, Nevada FALL 2017

Q&A From 15

mining and a younger sister. You might say it was in the family to start with. That’s how we got into it. The college of course in Butte is a mining school, so that is what drove the choices. With what I grew up with, it was an easy choice to decide where to go to school because I already lived there … It goes beyond that.

My dad went into it. It was a big employer in Butte. He had family ties, as well: His dad worked at the mine, and uncles who worked in mining, as well.

If you could spend a day with one person, who would it be and why?

It would be my dad. He passed on a number of years ago, but like I said, he shaped me into the person I am, and he was quite a man. He didn’t have a degree as a geologist, but he was a draftsman, and that’s how he picked it up, drawing the stope maps, and at some point, they decided that he had what it took. He eventu- How does safety in the minally became the head geologist in ing industry compare with Butte until he retired. That was safety in other industries?

My career has been entirely in quite an accomplishment. mining, so I don’t have a great What made you decide to get exposure to other places, but into mining? what I can tell you is that as we’ve I grew up in Butte, Montana, progressed on the safety journey which is a mining town not dif- here at this site, we have had an ferent than Elko. My dad was impact on the community, as in the industry, as well as his well. We have had employees brother, for a long time. I have that have stopped at construcan older brother that is also in tion sites and pointed out some

to put into it, and that goes for both the production and the safety side. You need both of those things to happen, but they don’t have to happen right now.

Our culture right now is: We put thought into the risks associated with what we’re about to do; and we put plans in place to mitigate those risks; and we stop when we need to stop because something changes.

That deliberate approach— although it doesn’t feel right taking the time to check yourself and your co-workers to make sure that you’re making the right moves—is how we produce the improvement that we have. It’s hard to do that all the time, but if you have the right people thinking about that stuff, somebody will be the one to say, “Hey, time out here What advice do you have for for a minute. Let’s think about employees of any level just this here for a minute.” entering the mining profession?

You’ll get out of the mining industry what you’re willing of their deficiencies that maybe somebody ought to take a look at. I remember a story, someone said, “What is it with you Elko people?” From that perspective, I think we have a heightened sense around the safety issues, and we do believe that speaking up and watching others is important.

The mining industry used to be thought of as one of the most dangerous activities, and there are definitely hazards and risks, but I think we have done a lot as an industry overall focusing on that. I don’t believe that most people look at it as the most dangerous thing to do. There are an awful lot of jobs out there that are more risky than the mining industry. I’m pretty proud of the fact that the mining industry has turned things around.

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FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 17

I chose to look the other way DAN MERRELL ‌I could have saved a life that day, But I chose to look the other way.

It wasn’t that I didn’t care; I had the time, and I was there.

But I didn’t want to seem a fool, Or argue over a safety rule.

I knew he’d done the job before; If I spoke up he might get sore.

The chances didn’t seem that bad; I’d done the same, he knew I had.

So I shook my head and walked on by; He knew the risks as well as I. He took the chance, I closed an eye; And with that act, I let him die.

I could have saved a life that day, But I chose to look the other way.

Now every time I see his wife,

Mine safety awards

‌INDIVIDUAL SAFETY AWARDS

I know I should have saved his life.

That guilt is something I must bear; But isn’t something you need to share.

If you see a risk that others take That puts their health or life at stake.

The question asked or thing you say; Could help them live another day.

If you see a risk and walk away, Then hope you never have to say, “I could have saved a life that day, But I chose to look the other way.”

This poem hangs on the wall at the Porter-Merrill Safety Training facility in Elko. The certified center provides Mine Safety and Health Administration courses.

Read about the training experience on Page 24.

General Manager: Keith Jones – Small Mine Development Safety Manager: Tim Burns – Newmont Mining Corp., Carlin Safety Professional: Tammie Neff – Barrick Nevada, Cortez Dallas Archibald – JR Simplot Co. Allison Jensen – Newmont Mining Mine Manager: Tony Carroll, Barrick Nevada, Cortez Don Wilhite, Newmont Mining, Twin Creeks Superintendent: John McCurry – Barrick Nevada, Cortez Underground Jesse Madrid – Coeur Mining, Rochester Scott Olsen – Kinross Gold Corp., Bald Mountain General Supervisor/Middle Management: Kevin Boswell—Barrick Nevada, Cortez Underground Mike McKinnon—Newmont Mining, Twin Creeks Lee Johnson – Barrick Nevada, Goldstrike process Henry Follman – Klondex Mines Ltd., Midas Supervisor (Tier 1): Kellie Primeaux – Atlas Copco See Awards, 18

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18 • MINING QUARTERLY, Elko, Nevada FALL 2017

Awards

Lonnie Bales – Klondex, Midas Tristan Stengel – Klondex, Fire Creek From 17 Clemente Gomez – Klondex, Hollister Pamela Ward – Newmont Mining, Twin Creeks Marvin Cummings – Barrick Nevada, Goldstrike Andrew Richey – Newmont, Twin Creeks process Kenneth Braaten – Newmont, Leeville Loren Cooney – Coeur Mining, Rochester Darren Coats – Newmont, Leeville John Hobbs – Kinross Gold, Bald Mountain Ernesto Gomez – Silver Standard, Marigold Chris York – Klondex Mines, Fire Creek Christopher Vedis – Newmont Mining, South Area Supervisor (Tier 2): Pete Quintana – KGHM, Robinson Tammy Elkins – Kinross Gold, Round Mountain Juan Noriega – Kinross Gold, Bald Mountain Ernesto Manzo – Newmont Mining, Twin Creeks Surface Operations: Trainer: Large – 300 plus employees Mark Hurlbert – KGHM, Robinson FIRST: Newmont Mining Corp., South Area James Browning – Silver Standard Resources, SECOND: Newmont, Phoenix Marigold THIRD: Kinross Gold Corp., Round Mountain Emergency Response: Medium – 100-299 employees FeLisha Haslem – KGHM, Robinson FIRST: Coeur Mining, Rochester Pete Kuhn – Silver Standard Resources, Marigold SECOND: Barrick Nevada, Arturo Safety Champion THIRD: Newmont Mining, Emigrant Eric Caudill – Barrick Nevada, Goldstrike surface Small – 20-99 employees Rodney Roberts – Barrick Nevada, Cortez – process Chelsey Jackson – Barrick Nevada, Cortez FIRST: Rye Patch Gold, Florida Canyon FIRST: MDW Pan, Pan Mine Underground Jason Krotts – Barrick Nevada, Cortez Underground FIRST: Jerritt Canyon Gold, Enfield Bell Mine Annette Schumacher – Coeur Mining, Rochester Underground Operations: Axel Lopez – EP Minerals, Lovelock operations Large – 300 plus employees

MINE OPERATORS SAFETY AWARDS

FIRST: Barrick Nevada, Cortez Underground SECOND: Newmont Mining, Leeville THIRD: Barrick Turquoise Ridge

Medium – 100-299 employees FIRST: Klondex Mines, Midas SECOND: Newmont Mining, Exodus THIRD: Small Mine Development, SSX

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FIRST: Art Wilson Co., Adams Claim FIRST: EP Minerals, Colado Mine FIRST: Graymont Western US, Pilot Peak FIRST: Gypsum Resources, Blue Diamond FIRST: M-I, Nevada Operations FIRST: PABCO Gypsum, Apex Quarry FIRST: Simplot Silica Products, Simplot Mill & Pit

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20 • MINING QUARTERLY, Elko, Nevada FALL 2017

NvMA introduces 4 safety award winners

I

f you’ve spent time at a mine or know a miner, you have certainly heard the phrase, “safety first.” It might sound simple, but for Nevada miners, and specifically for the Nevada Mining Association’s Safety Award winners, safety is consistently the No. 1 priority each and every day.

NvMA member comDANA BENNETT panies have long integrated stringent protective practices into their safety management programs and invested in ongoing, in depth BARRICK GOLD CORP. safety equipment, training and Jason Krotts, Cortez Mine drills. However, each NvMA Safety Award winner has proven commitment to protecting the overall community. Following his or her own outstanding safety of their fellow miners and are brief introductions to a few

of this year’s impressive award winners, who are among the honorees to be recognized at the association’s annual convention Sept. 9:

Jason Krotts, Cortez Mine 2017 Safety Award winner Jason Krotts spent nearly 20 years as a professional firefighter before beginning work at Barrick Nevada’s Cortez Mine.

Krotts, a member of the underground mine rescue team and the mine safety committee, applies discipline, creativity and a long history of safety training to the mine site every workday.

With a keen eye for safety, he spurred the creation of the Cortez Mine’s prefire plans for mine structures. These plans serve as

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FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 21

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Tammy Elkins, Round Mountain Mine blueprints to identify hazards, utility shut-off locations, occupancy areas, and other potential issues for firefighters and rescue crews.

Thanks to Krotts, the Cortez Mine is drafting these plans to be at the ready for mine rescue personnel.

Tammy Elkins, Round Mountain Mine Tammy Elkins has worked in the ore process department at Kinross Gold Corp.’s Round Mountain Mine for 30 years and has never had a lost time incident or other injury. In her position, she supervises many of the new miners on the site with less than one year of experience.

Even with a “fresh” crew, she has managed to reinforce safety culture, and her team has gone more than two years without a single reportable incident.

Elkins uses daily safety meetings and lineouts to encourage employees to share their safety experiences with one another.

Participation from her whole team is mandatory. These meetings are also attended by outsiders from other departments.

She has good reason to focus on safety: The “pad crew” at

KLONDEX MINING LTD.‌

Clemente Gomez, Hollister Mine Round Mountain had no losttime incidents for more than 11 years, from 2001 to 2012. She knows firsthand that zero injury is possible and has had it in her sights before.

Clemente Gomez, Hollister Mine Clemente Gomez’s official job title is mine electrician at the Klondex Mining Ltd. Hollister mine, but he serves in a variety of other vital capacities, including mine rescue trainer, mine rescue team member, See Awards, 22

22 • MINING QUARTERLY, Elko, Nevada FALL 2017 Twin Creeks mine core shed.

Her commitment to personal safety is regularly proved through her actions. She recently delivered safety gloves to all contractor drilling crews, along with a discussion on staying focused and using proper tools on the job.

Awards From 21

relief rescue team lead, and mineARC refuge chamber certified inspector.

Gomez helps maintain and operate the Hollister mine’s emergency escape hoist. He also regularly trains new employees on the hoist’s location and operation.

Gomez also demonstrates his commitment to safety by donating countless hours of personal time to training future miners for mine rescue competitions. He and the Klondex mine rescue team coordinator were instrumental in assisting the Idaho School of Mines Rescue Team with training, equipment and mentoring during the recent Nevada Regional Mine Rescue Contest.

NEWMONT MINING CORP.‌

Pamela Ward, in orange, Twin Creeks Mine

Pamela Ward, Twin Creeks Mine

by the Geology/Drill Services/ Drilling Contractor group.

Ward also serves as secretary of a Vital Behaviors Team, working to advance Newmont’s zero Pamela Ward is a geotechharm safety culture. She plays a nician assigned to the geology department at Newmont Mining critical role on the team, which is responsible for many safety Corp.’s Twin Creeks Mine. initiatives.

One of the best examples of To encourage drilling conWard’s unwavering commitment to a safe workplace is her contri- tractors to submit safety ideas and concerns, Ward established bution to the more than 3,000 a safety suggestion box at the days of “zero harm” recorded

It would be impossible to tell the story of our hundreds of safety award nominees in just one column. Suffice it to say that each of these award winners, along with the 69 other 2017 recipients, are leaders pushing the industry to zero harm. This important motto serves as an important reminder that any injury on the mine site, no matter how small, is unacceptable, and that every miner at every level of the operation must do his or her part to work safely each and every day.

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24 • MINING QUARTERLY, Elko, Nevada FALL 2017

Mine safety course opens eyes to the unexpected

2016 016

READERS’

CHOICE EN

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ICE

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TA I N M

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RV

tour mines.

For the next 24 hours over two days at MSHA-certified Porter-Merrill Safety Training, owned for 25 years by Roxanne Merrill, I tried to paid close attention to the course safety and history lessons — and my surroundings.

“They’re long days,” Heath said, “but they’re profitable days.”

E

David Heath, Mine Safety and Health Administration instructor, demonstrates how to use a self-rescuer breathing apparatus.

T

S

SUZANNE FEATHERSTON‌

NK

I‌ missed the gorilla.

David Heath, instructor of the Mine Safety and Health Administration training, had said to watch a video and track how many times a basketball passed between members of a team wearing white T-shirts.

I zeroed in on the task, focusing all my energy into watching the ball and white shirts. At the end of the video, Heath asked how many of us class participants had noticed the background curtain color change from red to gold, a teammate leave and a person in a gorilla costume walk out and beat its chest.

“Of course, if you miss a gorilla, what else could you miss?” Heath asked. “So I want you to pay more attention to your surroundings.”

He now had my attention. He’d just shown me how much I needed the New Miner Surface Part 48 Mine Safety training, which I signed up for to ensure that I am ready, as Mining Quarterly’s new editor, to safely

I joined a roomful of other students, including those doing an eight-hour annual refresher and other newcomers like me.

Professions represented included scaffold building, construction, laboratory work, equipment operating and commercial truck driving. Elko City Councilman Reece Keener, who also owns PNCC, job seeker Matt Gazewood and new hire Laura Squires were among Heath’s pupils for the Thursday through Friday course in late July.

Next up, Heath described U.S. mining history, including the major mine disaster at Idaho’s Sunshine Mine that led to the creation of MSHA in 1977, and ultimately, the implementation of courses such as these.

“I learn from the mistakes of the past so I don’t do it,” Heath said, instructing that this should be the attitude of safety students.

“I’m doing it because I want to go home to my family with all my fingers, toes and eyeballs in place.” He stands up from his stool to shake his arms and wiggle all 10 fingers.

Mining is on the U.S. Bureau of Labor Statistics’ list of most dangerous professions,

O D & DRI

sfeatherston@elkodaily.com

FO

SUZANNE FEATHERSTON

RE

2013

C R E AT I O N

2014

2015

FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 25 but the number of injuries and fatalities in mining has decreased since the industry’s early days. In 1907, an estimated 3,242 deaths occurred in coal mining, according to MSHA; and in the early decades, the industry lost 1,500 or more lives per year to all types of mining. Over the past decade, however, mining deaths have reached all-time lows. In 2011 and 2012, the administration reported 36 fatalities each uear, including 16 in metal and nonmetal per year.

“There are costs I cannot accept, and that’s the cost of human life,” Heath said. “Overregulation I will complain about all day long, but good regulations save lives.”

Throughout the class, Heath bantered with students, drawing on his decades of experience working in the mining industry, in Nevada and worldwide. When a student talked about the tricks behind operating a jack-leg

drill, Heath could relate. On his screensaver, he rotated through a slideshow of eye-catching mineral specimens from a museum in Romania. He described what it was like to land in a small plane on a mountainside in the remote regions of Chile and regaled us with tales of a large nugget and a cavern of crystals, both in Nevada.

Despite the long days and heavy subject matter, Heath kept our attention with antics, saying he was born a “consummate smartass.” He used amusing turns of phrase that helped pass the hours: how men’s eyes “sweat,” not tear; wads of gum could “choke a mule;” that some tales are “hogwash;” and some people talk “faster than an auctioneer on crack.”

Heath gave us another reason to pay attention. Every now and then, in a competition for points to determine who’d get their MSHA certificate filled

out first at the end of the course, he quizzed us about what we learned. We earned points for correct answers on worksheets for subjects such as hazard communications (I had the highest score), and for being observant of objects in our surroundings, such as the color of the stuffed dog on a bookshelf (white) or how many times he changed his baseball cap (three—see, I’m getting it).

The class covered the basics of topics including personal protective equipment, respirable dust, first aid, diseases contracted from mining, gases, and vehicle and traffic safety.

Thanks to a video on safe dumping practices, I now know more than I ever thought I would about berms. That was all on the first day.

T h e m os t eye - o p e n i n g moments of the course for me came with the awareness of how many mistakes I nearly

make day to day. A wrong move while power washing the deck could inject water below my skin; changing a lightbulb could expose me to electrical current; and catching my wedding ring could slide the skin off my finger. With this newfound knowledge, I’m not sure if I feel safer or more endangered around mines or in everyday life. I guess that’s the point: to raise awareness.

Come Friday, I was not the person with the highest score nor the first out of class with my paperwork, but, with a raised awareness, I hope that next time, I’ll see the literal or figurative gorilla, and perhaps make a decision that saves my or another’s life.

As Heath handed each student his or her certificate, he shook hands and said, “Stay safe.”

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26 • MINING QUARTERLY, Elko, Nevada FALL 2017

Zero harm summit focus TONI R. MILANO tmilano@elkodaily.com

‌The goal of a zero-harm workplace is never far from the minds of Newmont Mining Corp. employees and contractors.

The team behind the 2017 Contractor Safety Summit, “Walk the Talk,” strives to keep safety first – both at home and at the mine site – and on everyone’s mind all the time.

Started in 2012, the summit creates a “safety atmosphere” that invites Newmont’s contracting workforce to become part of that goal, said Joe Mallea, Newmont health and safety and loss prevention regional contract management representative.

“We want to make sure that our contracting companies know and understand zero harm involves everyone on the site,” Mallea said. “If we have a contractor get injured on-site, it’s just like

“We want to make sure that our contracting companies know and understand zero harm involves everyone on the site.”

Joe Mallea, Newmont health and safety and loss prevention regional contract management representative

a Newmont employee getting injured on-site. It has the same effect.”

This year’s summit in June at the Elko Conference Center, included presentations about home safety, communication and innovations that aid safe working conditions. It also gives participants a chance to share ideas and success stories.

“We use the term ‘steal with pride’ a lot because nothing is sacred in safety,” Mallea said, adding that employees “give me more information about the safety system they’re using.”

The summit is a regional event that includes representatives from

TONI R. MILANO‌

A drunk driving simulation using goggles to create vision at, under or above the legal limits was demonstrated at the 2017 Contractor Safety Summit in June.

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FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 27

TONI R. MILANO‌

Dwight Stoneman of Small Mine Development, Jon Wickizer of Brahma Group and Joe Mallea of Newmont Gold Corp. talk about the benefits of developing safety awareness around the home at the 2017 Contractors Safety Summit in June.

Newmont’s mine sites. Jon Wickizer, corporate heath safety environmental director of Utah-based Brahma Group, and Boise-based Small Mine Development Safety Superintendent Dwight Stoneman helped coordinate the summit.

Wickizer called the annual summits “a great professional safety networking system,” that sells “safety as a message.”

The goal is to get “everybody on the same page with that zero goal and how we accomplish it,” Wickizer said.

Before the contractor safety summits, each site had its own goals, said Mallea, which “made it tough for our contractors.”

“The intent is to bring all of the sites together so no matter where they end up working throughout the year, the same expectations and the same goals are consistent throughout the mining environment for Newmont as a whole and all of the other sites.”

At this summit, Newmont employees and contractors learned about taking safety training home and implementing it around the household, something that could boomerang to a future workforce.

Employees are teaching children at home to wear personal protective equipment, Stoneman said. “So when we bring that

child into the workforce in 20 years, instead of saying ‘you’ve got to wear [PPEs]’ they’ll be asking ‘where is [it]?’”

However, Mallea said he believes PPEs are not to be relied upon, but instead protective clothing “is our last line of defense.”

“Our PPEs are there to protect us if something goes wrong,” he said.

The rate of all metal and nonmetal mining injuries for 200,000 hours worked among operator and contract employees since 2008 has decreased from 2.87 to 2.09 in 2014, according to Mine Safety and Health Administration statistics.

Mallea noted that Newmont has seen injuries and accident statistics drop since the summit started, but emphasized that being proactive is the right course of action.

“Let’s identify that safety issue [and] correct it before we have that accident on site,” Mallea said, explaining that the purpose of the summit isn’t meant to focus on strict procedures, and keeps “the atmosphere light.”

If each person attending the summit changes “one thing they do from a safety standpoint,” Wickizer said, “that is going to make a difference.”

28 • MINING QUARTERLY, Elko, Nevada FALL 2017

Mines perform drilling rig rescue TONI R. MILANO tmilano@elkodaily.com‌

‌The 2017 Elko Mine Safety Olympiad reached new heights Saturday when 14 mine rescue teams approached a mock disaster scene involving a bomb blast and drilling rig, with at least one “victim” left unresponsive 40 feet in the air.

Black Thunder Mine from Wyoming took top honors as the top A flight team and Newmont Phoenix took first place in the B flight division during a banquet at the Elko Conference Center that concluded the threeday event, which brought mine safety teams from Nevada, California, Colorado, Utah and Wyoming to Elko for the 31st annual Safety Olympiad in July.

Thirteen teams traveled to Elko, with alternates comprising another team to compete for A flight and B flight status, said Vice President and General Manager Dave Hendriks of Kinross Round Mountain, this year’s host team.

TONI R. MILANO, ELKO DAILY FREE PRESS

A Black Thunder Mine rescue team member climbs above an unresponsive “victim” during a mock disaster scenario at the 2017 Elko Mine Safety Olympiad.

The teams competed the first day in confined space, firefighting, medical emergency, hazardous materials, high angle ropes, triage and written exam.

During the banquet, Mitch Cannon of Kinross Bald Mountain was given the Rescue of the Year award, with Black Thunder Mine taking the sportsmanship award and the Anna Squires trophy.

Competing this year in addition to Black Thunder and Kinross Bald Mountain were Barrick Nevada Combined, Barrick Nevada Cortez, Barrick Nevada Goldstrike, Boron Operations, Newmont Carlin, Newmont Cripple Creek and Victor, Newmont Long Canyon, Newmont Phoenix, Newmont Twin Creeks, Peabody NARM and Rio Tinto Kennecott.

The event was sponsored by Boart Longyear, Cashman, Industrial Supply and Southwest Energy, Hendriks said.

Black Thunder Mine is hosting the International Mine Rescue Competition the first week in August in Gillette, Wyoming.

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30 • MINING QUARTERLY, Elko, Nevada FALL 2017

“Thirty-one years is an impressive mine life and 150 million ounces is amazing. I don’t know about you guys, but I bet there’s another 150 million ounces to come out of this place over the next 30 years.”

— Mitch Krebs, Coeur Mining Inc. president and CEO

Coeur mine celebrates 150 millionth ounce, 2.5 years safety MARIANNE KOBAK MCKOWN Mining Quarterly former editor‌

‌Coeur Rochester Mine celebrated two achievements June 13 – 150 million ounces poured and 2.5 years of no losttime accidents.

Rochester is about 13 miles northeast of Lovelock in Pershing County. Coeur Mining Inc., based in Chicago, has operated Rochester since 1986. The mine recovers gold and silver through a heap leach process.

“This is a heck of a celebration for us,” said General Manager Robert Stepper.

He cited the production celebration and the safety record, which equals 1.5 million man hours without a losttime accident.

“We have a tremendous workforce,” he said. “It’s the safest workforce I’ve ever worked with.

The level of safety consciousness at this site is outstanding. That probably derives from a good number of the people who work here are related to each other.

When you talk about being a family, it’s a family up here.

They’re just great employees.

MINING QUARTERLY, FILE‌

Coeur Rochester General Manager Robert Stepper, left, holds a certificate from Sen. Dean Heller in recognition of the mine’s 150 millionth poured ounce.

Coeur President and CEO Mitch Krebs, middle, talks to Michael Lienhard, who represented Heller’s office at the celebration.

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FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 31 They’re great to work with and great to have around. I couldn’t be luckier to have them.”

Coeur President and CEO Mitch Krebs thanked everyone for attending.

“It’s great to be out here in the Silver State at the largest primary silver mine in the state,” he said. “Thirty-one years is an impressive mine life and 150 million ounces is amazing. I don’t know about you guys, but I bet there’s another 150 million ounces to come out of this place over the next 30 years.”

The mine processes 80,000 tons of earth a day, said Assistant General Manager Greg Robinson. Rochester produces about 5 million ounces of silver and about 50,000 ounces of gold each year.

Rochester began production in 1986. It employs about 300 people.

Several officials from around

MINING QUARTERLY, FILE‌

A haul truck operates in June at Coeur Rochester. the state attended the event.

Nevada Division of Minerals Administrator Rich Perry said it was important for him to be there for two reasons.

“For me personally, because I was here when it started up 31 years ago,” he said. “For the division, because it’s a milestone

in production for a mine that’s been a steady producer, that’s employed a lot of Nevadans and supported a lot of Nevada businesses for many years.”

Dylan Shaver, representing the Nevada Mining Association, said it was important for the organization to be at Coeur

Rochester because the site is celebrating two large accomplishments.

“These are all numbers that everybody in the state can be proud of,” he said. “We’re proud of them in the association, but all of Nevada can be proud of this.”

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People of Mines

Nigel Bain ‌Gov. Brian Sandoval appointed Nigel Bain and Mary Korpi to the Commission on Mineral Resources June 19. Bain replaces John Mudge as one of two largescale mining commissioners.

He is the executive director of Barrick Gold USA and previous Nevada Mining Association chairman. Korpi replaces Fred

Mary Korpi

Gibson as the public at-large member. Both will serve fouryear terms on the commission.

She is a community leader and retired Newmont employee with almost 40 years of industry experience in fields including metallurgy, loss control and external relations. The Nevada Division of Minerals is responsible for

Danny Taylor

permitting, inspecting and monitoring oil, gas and geothermal drilling activities on the state’s public and private lands.  Longtime University of Nevada, Reno, associate professor Danny Taylor retired in spring 2017. A professional engineer with three degrees,

including a doctorate from the Colorado School of Mines, Taylor has taught at the Mackay School of Earth Sciences & Engineering’s mining department since 1979. He twice served as chair of the mining engineering department, for a combined total of 13 years, and was the assistant dean of Mackay for five years. Taylor

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Sheri Hickok plans to continue activities as a mining industry consultant and is expected to serve as UNR emeritus faculty.  Newmont Mining Corp. elected Sheri Hickok and Molly P. Zhang to its board of directors July 19. Hickok is the general manager of global project development with Onshore Wind at GE Renewable Energy

Molly Zhang

and has served in leadership roles with GM over her 22-year tenure. She holds a bachelor’s degree in mechanical engineering from Kettering University, a master’s degree in engineering from Purdue University and a master’s degree in business administration from the University of Michigan. Retired, Zhang’s career in multinational mining services and the

L.W. Eklund

chemical and industrial sectors included senior executive roles with Orica, which provides products and blasting services to the mining industry.

She holds a Master of Science degree in chemistry and a Ph.D. in chemical engineering from Clausthal University of Technology in Germany.  National Mining Hall of Fame

honoree Lew Eklund died July 19 at the age of 85. He devoted more than 45 years to the mining industry and contributed his talents to northeastern Nevada.

Eklund founded Eklund Drilling in 1960, landed a contract with Newmont’s Carlin Trend Property, then went on to make innovations that increased mine productivity and decreased environmental impact.

34 • MINING QUARTERLY, Elko, Nevada FALL 2017

UNR at mine comp SUZANNE FEATHERSTON sfeatherston@elkodaily.com‌

‌M ining students from the University of Nevada Reno’s Mackay School of Earth Sciences and Engineering mucked, sawed, hand drilled, gold panned, stood track, drilled and surveyed their way through the 39th annual Intercollegiate Mining Competition in Kentucky this spring.

The competition, hosted by the University of Kentucky College in Georgetown outside Lexington on March 24-25, tests contestants’ performance and time at seven old-fashioned mining techniques. More than 200 competitors in teams from 17 colleges around the world attended. Winners take home recognition for finishing among the top three in each category

and placing first overall.

“It’s a good opportunity to meet and tell stories and hear everything that is going on in the mining industry,” said contestant Nick Winter, a mining engineering student who expects to graduate from UNR in 2019.

“It’s always good to have a ton of people you know in the mining industry.”

Founded in 1978, the event remembers the miners who died in Idaho’s Sunshine Mine fire in 1972. UNR has been sending teams — the Mackay Muckers — since the 1980s, won first place last year in Butte, Montana, and hosted the competition in 2011.

“The mining competition is a great way for students to meet people from other mining schools and build relationships with the future workforce in the

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The Mackay Muckers at the 39th annual Intercollegiate Mining Competition in Kentucky are, top row from left: Nate Burke, Nick Winter and Dalton Koslosky; and bottom row, from left: Kameron Devine, Trey McGowan and Jake Olives. mining world,” said Emma Baker, mining team president. “A nice juxtaposition between the past and the here and now, our end goal is the same but there is a [great] difference in the methods and tools used to get there.”

Although this year’s all-men UNR team placed close to last, Winter said he hopes to regain a

win next year in England, where the 40th International Mining Games competition will be hosted by Camborne School of Mines at King Edward’s Mine near Cornwall.

“There’s always next year, too,” Winter said.

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36 • MINING QUARTERLY, Elko, Nevada FALL 2017

Nicholas Romano, left, and Marcus Alsagoff, interns for the Nevada Division of Minerals Abandoned Mine Lands program, build an enclosure fence at an old mine site north of Tonopah in Nye County this summer.

NEVADA DIVISION OF MINERALS‌

30 years of Abandoned Mine Lands 81 percent identified hazards secured since inception ADELLA HARDING Mining Quarterly Correspondent

‌Thousands of potentially dangerous deserted mine workings from the past dot Nevada’s landscape, but the state’s Abandoned Mine Lands program has been securing these sites for 30 years, decreasing related accidents and fatalities.

Over the years, people have fallen into old mines or drowned in old pit lakes, but there have been no reported accidents at abandoned mines in more than three years, thanks in

part to the program.

“These aren’t playgrounds,” said Robert Ghiglieri, chief of the abandoned mines program for the Nevada Division of Minerals. “It’s not worth the risk to go into these.”

From 1961 to 2011, 20 people died in accidents at abandoned mine sites. The last fatality occurred March 2011, when a 28-year-old man fell 190 feet down a mine shaft in Pershing County. The last reported abandoned mine accident was in 2013, when a 17-year-old male incurred minor injuries in a fall down a 60-foot mine shaft in Lyon County.

Miners and prospectors have looked for minerals in Nevada

for more than 150 years, traveling across the state and leaving behind mine shafts, tunnels, pit lakes and mill sites. Old-time miners had no construction standards to follow, and they just took the gold or silver and got out as quickly as possible. Modern mines in Nevada are required under state and federal regulations to reclaim mining sites after mining ends and eliminate or secure any potential hazards.

Companies also post reclamation bonds ensure that the work is done.

The Nevada Legislature created the AML program in 1987 in response to accidents at old mines and expanded the program in 1989 to cover responsibility for

securing sites on public lands, called the orphan mine openings.

The minerals division report for 2016 released this summer states that the second-highest number of hazards, 1,196, were discovered in 2016. Of those, 1,191 hazards were secured in 2016. The highest number of hazards discovered was in 1989, when nearly 2,500 hazards were found.

Of the abandoned mining sites discovered that needed securing, 81 percent are now secure. However, Ghiglieri estimates that after 30 years, the AML program in Nevada is about 50 percent complete because of hazards yet to be found.Hazards are still being discovered.

FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 37 discovered. Ghiglieri said that as of July 20, the 2017 program has identified 597 new hazards, secured 623 hazards — including 104 permanent closings — and revisited 557 sites secured earlier.

The 2016 report states there are more than 200,000 abandoned mining features in the state, and of these the division estimates that roughly 25 percent are significant enough hazards to need securing.

The U.S. Bureau of Land Management, which manages 61 percent of the land in Nevada, estimated that more than 297,000 abandoned mine features have yet to be inventoried in Nevada, said the agency’s AML program NEVADA DIVISION OF MINERALS‌ leader, John Callan, out of the A glory hole, an old mine workings, collapsed in Storey County this year, and the state BLM office.

Nevada Division of Minerals acted quickly on this hazard because it is on a trail travGhiglieri said that the prior- eled by dirt bikes. The glory hole is now fenced. ity always has been to eliminate hazards closest to well-traveled use that. The agencies also Specific sites Nevada AML roads, tourist attractions and exchange reports on all their Uranium was also produced projects so the database can in Nevada, and the division popular places.

Program: By reported that the final securOf the 1,191 secured in 2016, be updated. the Numbers 491 sites were orphans, which Callan said the state BLM ing of the Apex Mine in Lander means the sites are on public land maintains a separate database for County was finished in 2016, Hazards found and not on active claims, while just BLM sites when it comes to when the last access to under20,683 total 700 were on private land or minseeking federal funding but rec- ground workings was secured 16,802 secured ing claims. The Nevada Division onciles its base with the state’s with bat-compatible steel gates, 206 permanently and uses the state data base for grates and natural caving proof Minerals report for the 2016 secured in 2016 program states that 972 hazards closure projects. cesses. The Forest Service han1,196 in 2016 were secured by fencing, 146 by “The BLM worries about the dled the work at Apex. backfill or sealing, 60 secured BLM. NDOM worries about the The mine was the largest ura2,500 record in 1989 with bat-compatible closures, whole state,” said Kurt Miers, a nium mine in Nevada, mined 859 in Elko County state BLM office environmen- between 1954 and 1966 from a and nine caved in by nature.

3,080 most in Esmeralda tal protection specialist, whose small open pit and from underCounty Joint effort duties include the AML program. ground, with all the ore shipped 76 fewest in Carson City The minerals division adminThe AML program identi- to Utah for processing. area isters the Abandoned Mine Lands “There was no processing on fies and ranks dangerous conprogram under the Nevada Comditions at the abandoned sites site so the uranium hazard was Funding mission on Mineral Resources, mined mostly before September minimal,” Ghiglieri said. $840,985 in 2016 working closely with the BLM, 1989. Many ALM sites are small Another example of a large $556,542 in 2015 the U.S. Forest Service and the underground operations dug by project is American Canyon in prospectors looking mainly for Pershing County, a BLM abanNevada Department of Wildlife.

History gold and silver. Some are from doned mines project that was Private companies, holders of 1987 Nevada AML larger abandoned mines. AML fenced in 2016, with more sites to mine claims and landowners also program started sites include mills, mill tailings, be fenced this year. (See related are involved. acid mine drainage, waste rock story Page 41.)

“We have a good working 1989 program expanded dumps, heap leach pads, pit relationship. We realize we don’t This year, a glory hole, a 20 fatalities 1961-2011 lakes, chemical hazards, and caved-in mine, opened in Storey want to duplicate work,” Ghiglieri in abandoned mines said. “I’d like to think we are one associated structures and roads, County. Ghiglieri said the hole of the more advanced states.” tains the database for the AML according to the Nevada Division The minerals division main- program, and the other agencies of Environmental Protection.

See Abandoned, 38

38 • MINING QUARTERLY, Elko, Nevada FALL 2017

Abandoned From 37

was roughly 40 feet by 20 feet on the surface and 35 feet deep.

When it caved in, it took out a two-track road often used by dirt bikes.

“The hazard was discovered by a member of the Storey County emergency management team.

They put some flagging around the hazard and then contacted NDOM,” he said.

The division built a temporary exclusion fence “the same day we were notified,” Ghiglieri said.

The glory hole was on a claims patent deeded to the state a few years ago. The division worked with the Nevada Stand Lands Division for approval to backfill the hazard and did that this summer.

Percent secured

Over the past 30 years, 20,683 hazards have been discovered in Nevada and 16,802 of them recorded as secured, including 717 secured in Elko County out of 859 found. The most found is in Esmeralda County, 3,080, and 2,547 of them have been handled. The second largest number, 2,839, was discovered in Nye County, and 77.9 percent, or 2,211, have been secured.

The smallest number of abandoned mine hazards, 76, was found in the Carson City area, and 100 percent of those have been secured, according to the report. Eureka County had 876 sites found, 739 of them secured, while Lander County had 634 sites discovered and 540 secured. There were 1,901 sites found in White Pine County and 58.1 percent of them, or, 1,105, are secure.

Of the hazards secured in 2016, mining claimants and private property owners secured 322 of the hazards, and division staff, contractors and volunteers

NEVADA DIVISION OF MINERALS PHOTOS‌

This abandoned mine in Humboldt County was the 20,000th old-mining hazard the Nevada Division of Minerals inventoried in the state as of July 2016. secured 538 hazards, according to the report. Interns secured 369 hazards.

If hazards are on public land, the government must evaluate them for cultural and biological resource potential, according to the report.

Those who hold mining claims on BLM-managed land in the state are required to secure any old mining hazards on their claims, and the BLM sends letters to let them know of hazards on their claims, Miers said.

“We give them 30-day notice, and if they don’t comply we go ahead with fencing,” he said.

The most hazardous abandoned mines might require permanent closure using backfilling; foam plugs; or bat-friendly structures, designed “to prevent humans from entering but allow bats to use” the abandoned mine site as habitat, Ghiglieri said. The

Securing abandoned mine hazards might require installing a bat gate so bats can still get into their habitat even as the site is secured to keep people and large animals out. This bat-compatible culvert gate was installed in Lyon County in 2016.

40 • MINING QUARTERLY, Elko, Nevada FALL 2017

NEVADA DIVISION OF MINERALS‌

The Nevada Division of Minerals inventoried this abandoned mine hazard in Esmeralda County this year. The sites that are inventoried are then secured, if hazardous, under the state’s Abandoned Mine Lands program in cooperation with the U.S. Bureau of Land Management, U.S. Forest Service and Nevada Department of Wildlife. gates, 60 of which were installed this year, have 6-inch gaps for the bats. There are 26 bat species in Nevada to be protected if it looks like an old mining site is now bat habitat, he said.

Of the hazards secured in 2016, the division reported that 206 of them were permanently secured.

Funding, interns

The minerals division hires college interns to assist with the AML program. They worked 14 weeks of last summer and three weeks of the winter. Ghiglieri said the winter work is in southern Nevada, where it is too hot in the summer.

The 2017 program has eight paid interns, who are all studying earth sciences and are likely

to work in the mining industry.

The number of interns varies, depending on funding.

“We got a little more money this year because claims are up,” Ghiglieri said.

There are no general funds used in the AML program.

Rather, funding comes from a $4 fee for every unpatented mining claim filed on federal land and a one-time $20 fee the division collects for every acre of permitted land disturbance in new and amended mine plans for public land.

Revenue dedicated to the 2016 abandoned mines program included $752,257 in mining claim fees, $5,280 in disturbance fees and $110,448 from assistance agreements with the BLM and/or Forest Service for

a total of $840,985, according to a chart in the 2016 minerals division Abandoned Mine Lands program report.

The 2016 revenue was the highest yet, up from $556,542 in 2015. The second-highest revenue year was 2013 at $792,218.

This is the first year that field work is fully digitalized.

The staff and interns use digital tablets to record GPS locations and their findings in the field.

Ghiglieri said the new system is more accurate. Those in the field also photograph every abandoned mine they find.

Boy Scouts also participate in the AML program. The division reported 10 Eagle Scout projects were completed in Clark, Lincoln, Lyon and Storey counties in 2016, resulting in 30 mine

openings secured and 32 repairs to existing fences.

Public education

Along with arranging to secure old mine workings to prevent accidents, the Nevada Division of Minerals also offers education about the dangers of old mines, including sending brochures for all fourth-graders in the state’s public and private schools.

The minerals division wrote that it reached more than 40,000 citizens in 2016 through the abandoned mines and minerals education presentations and the brochures.

The theme is “Stay Out and Stay Alive.”

FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 41

Remembering American Canyon Plans include interpretive sign

ADELLA HARDING, Mining Quarterly Correspondent

‌Chinese miners dug for gold in American Canyon in Pershing County in the late 1800s and early 1900s, and the U.S. Bureau of Land Management’s state office plans to tell the story at the site after the hazards are secured through the Abandoned Mine Lands program.

“The end goal is to have a kiosk out there. It’s pretty unique,” said John Callan, the state BLM’s leader for the AML program.

The American Canyon site hasn’t been mined since the early days; therefore, the barely disturbed, historic site is a good spot for a kiosk telling the story of the

Chinese miners once the hazards are fully secured, Callan said.

“It’s a cluster of shafts” ranging from 10 to 30 feet apart and from 20 to 70 feet deep, said Kurt Miers, an environmental protection specialist whose duties include abandoned mine projects with the state BLM office.

“Most of the features are shafts.

One or two are declines found inside there.”

A main fence installed in December 2016 as part of Nevada’s Abandoned Mine Lands program encompasses 139 old mine workings, Miers said.

Other fences enclosed another 37 workings for a total of 176 hazards fenced, with the help of the Nevada Division of Minerals, said Robert Ghiglieri, chief of the division’s Abandoned Mine Lands program.

Mine history

The Chinese in American Canyon left one of the highest densities of shafts in Nevada, according to the Nevada Division of Minerals’ Abandoned Mine Lands program report for 2016 released this summer.

The Chinese placer mined by hand for gold in American Canyon from the early 1880s to 1906, according to a history put together by former BLM archaeologist David Valentine.

He also wrote that about a dozen white people lived in the former Chinese village shortly after 1906, exploring for gold with two or three new shafts before 1909.

Euro-Americans discovered the placer gold deposits in American Canyon in 1881. They leased

their claims to Chinese men by 1884, after the easily accessible placer deposits were played out, Valentine wrote. They took royalty payments.

Roughly $1 million in gold came from the earliest workings at American Canyon, according to reports that Valentine cited.

The Chinese moved from Buena Vista Valley and Unionville to American Canyon, leaving low-wage jobs for the mine leases, and Hoback Kong was the first Chinaman to lease a claim.

He leased it from M.S. Bonnifeld, according to the history. Another Chinese man, Wong Lee, was responsible for construction of a ditch system in American Canyon to provide access to water.

The Chinese leaseholders See American, 42

42 • MINING QUARTERLY, Elko, Nevada FALL 2017

NEVADA DIVISION OF MINERALS‌

A 35-foot-deep old mine shaft is hidden 3 feet behind the sign in American Canyon. The Chinese mined for gold in Pershing County in the late 1800s and early 1900s.

American From 41

sublet 20 square-foot blocks assigned by lottery to male relatives or other Chinese men.

Valentine wrote that authorities disagreed on how many Chinese were in American Canyon at its peak in the 1890s, with reports ranging from 300 to 3,000, but Valentine estimates from primary source reports and newspaper articles that there were 200 to 300 at the peak.

He wrote that the Chinese men from the same provinces in China would segregate into groups that shared language and religious beliefs, and these groups were called tongs. The two tongs in American Canyon were Sanyi and Longdo.

This division sometimes

caused conflicts, including in 1893, when the tongs clashed, leading to a gun battle that killed two men, one from each side. There also were legal battles between the two factions, according to Valentine’s account.

The Chinese population dropped in American Canyon by 1900 for several reasons, he wrote, including age, depletion of easily accessed gold and more Euro-Americans hard-rock mining in the vicinity. By the 1910 census, all the Chinese-owned stores had closed, and only four Chinese men remained.

American Canyon is south of the Spring Valley Mining District, and the Rochester Mining District is now to the west. The American Canyon mining area was reorganized with the Spring Valley District when Euro-Americans showed new interest in the

area, Valentine wrote.

The first dredge in Spring Valley reportedly was the first in Nevada.

Federal Place Mines Co. built and operated the 2,000-cubic-yard dredge from 1911 to 1914. Then, the Spring Valley Gold Dredging Co. operated dredges, dragline excavators and a washing plant in lower Spring Valley Canyon from 1947 through 1949.

Safe site The Chinese at American Canyon left behind their mine workings, which pose a hazard and fall under the Abandoned Mine Lands program.

“We fenced in the physical safety hazards, which are the shafts,” said Miers in a conference call with Callan.

The cluster of mine workings was fenced in late 2016, but

more identified shafts are due to be fenced yet this year, using interns from the Nevada Division of Minerals, which manages the AML program for the state.

There is no record of any deaths or injuries at the old mine sites at American Canyon, but Callan said the danger increases with more ATVs and dirt bikes going into the remote areas.

The first step was the fencing, in coordination with the minerals division and Nevada Department of Wildlife, but final closure will come later with more funding for cultural and wildlife surveys.

Once securing hazards at the site is completed, the educational kiosk can be installed, preserving the memory of a safer American Canyon.

Tribal youth days

FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 43

Barrick supports culture, career

SUZANNE FEATHERSTON sfeatherston@elkodaily.com

Young Western Shoshone tribal members can earn an education and get a job while honoring the customs of their ancestors.

That was the message behind Barrick Gold Corp.’s third annual Tribal Summer Youth Career/Cultural Days at the South Fork Indian Reservation held July 20-21 and the Barrick-sponsored Shoshone Community Language Initiative with a graduation ceremony Aug. 4 at Great Basin College.

“Barrick sees this as a wonderful event, and a wonderful program, and we’re happy to partner with our college, our hometown college; happy to partner with the Shoshone communities in all the areas we work,” said Barrick U.S.A. Executive Director Nigel Bain at the language program graduation. “But [we’re] most proud of our ability to see the new generation of Shoshone people learn about their heritage, learn about their history ... the language of the Shoshone, not to let that pass by, not to allow that history and culture to disappear.”

Because all Barrick mining properties are on traditional Western Shoshone lands, the mining company partnered with the people to promote higher education among indigenous youths for the benefit and sustainability of the tribes. Through the collaborative agreement signed in 2008, Barrick offers college courses in native language, college preparation and

advising, scholarships, internships, and additional programs for economic and community development.

“It’s amazing that this year alone, we had 47 tribal members graduate from college” with associate, bachelor’s or master’s degrees, said Brian Mason, manager of Native American affairs for Barrick and member of the Shoshone-Paiute tribes of Duck Valley, from Owyhee.

That’s a 50 percent increase in the number of graduates over last year, and since the program came to fruition in 2012, Barrick has hired 125 tribal members. Through 2016, Barrick has awarded 1,075 scholarships totaling more than $2.14 million. Twelve students, including Mason’s granddaughter, Princess Mason, graduated from the inaugural Shoshone Community Language Initiative, earning dual credit for foreign language.

“It’s been really aggressive,” Mason said. “It’s been really successful.”

Shoshone Community Language Initiative During the language program graduation ceremony, the students introduced themselves in Shoshone then English and described the components of their five-week-long program. Each day included classes and activities through which the students could practice their language and See Tribal, 44

SUZANNE FEATHERSTON

Barrick Gold Corp. intern Teresa Garcia wears traditional dress to emcee the Shoshone Community Language Initiative graduation ceremony Aug. 4.

44 • MINING QUARTERLY, Elko, Nevada FALL 2017

Tribal From 43

learn about aspects of their culture from their elders.

“Our group was very grateful to learn from these elders because some of these topics we might not have learned from our families,” said graduate Adam Nalley.

Weekends allowed time for the students, all of Shoshone heritage but hailing from as far away as the East Coast, to go on field trips to places of historical significance, such as the Tosawihi Quarries and Hercules Gap. Ruby Valley made a big impression on Breeyanna Hooper, who said the trips opened her eyes to what her people have been through.

“I think it’s important that we went out to these sites as well as learning the language because we learn the culture on these

SUZANNE FEATHERSTON

A Barrick intern learns to process pinenuts from Melanie Smokey. trips,” she said. “But without the language, there’s no culture, and without the culture, there’s no language.”

Davis Gonzales, vice chairman of the Te-Moak and Elko Band tribal councils, emphasized the importance of “listening to the old folks,” he said. “That is where I got my language. That’s what’s really important about this opportunity for the graduates right now. … You have a Shoshone foundation. It’s for you now to build on this one foundation,

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to continue our legacy and the Shoshone language.”

He also extended his gratitude to Barrick. “On behalf of the Elko Band Council and Tribal Council,” he said, “I want to thank Barrick for all the work that they’ve done for us over all the years they’ve sponsored the Shoshone class.”

Career, Culture

Shanina Hicks, a Western Shoshone member from Duck Valley, described her success with Barrick support during the Tribal Summer Youth Career/ Cultural Days. As a scholarship recipient, Hicks attends Boise State University where she has finished her bachelor’s degree in social sciences and is working on her master’s degree in public administration. This summer, Barrick is sponsoring her as an employee to work in her field of study for her tribe.

“In general, they are helping

me develop skills to use in my career,” she said, explaining that the internship provides realworld experience and leadership skills.

Hicks was one of about 20 interns, some of whom talked about college and careers at the event. She addressed a group of about 180 teens and preteens from the eight Western Shoshone tribes gathered in the shade of a tribal arbor draped with willows.

The youths in attendance can follow a similar career and education path. Through the program, they are already employed through Barrick to work for their tribes. Summer jobs include maintenance or working for environmental or health services, among other pursuits.

The work puts money in their pockets while contributing to community development. The See Tribal, 46

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two-day event also featured a college fair with representatives from colleges in states including Nevada, Idaho and Utah.

Their interest shows initiative praised by guest presenter Andrew Iron Shell, community engagement coordinator for the Thunder Mountain Community Development Corp. in South Dakota.

“I’m really awed by all of you here because you had to fill out an application [to be here],” he said. “That’s what we need from our indigenous youth … to carry that value of, ‘We’re still here.’ ” In his presentation, Iron Shell explained about how the nonprofit, grass roots organization on the Pine Ridge Indian Reservation works to solve poverty, eliminate hunger and instill hope.

“We want to create change,” he said.

Iron Shell encouraged the Western Shoshone students to tap into their survival instincts and use the resources available to them, including the Barrick programs, to improve their quality of life. He also reminded them to never forget history.

“We used to think being isolated was a curse,” he said. “No, it is a gift.”

The gift is that it helped preserved Native American culture, he explained. The Barrick program promotes the continuation of Western Shoshone traditions, and invited several teachers to the July event to pass on ancestral knowledge.

Guest speakers Darlene Hooper Dewey and Melanie Smokey from Yomba demonstrated the historic uses for native plants and reminded the youngsters of their beliefs.

“You’re learning a lot,” Dewey

said, “and I thank Barrick for providing our language teachers and you kids for learning.”

The mother-daughter duo described how sage is considered a physical and spiritual disinfectant; how buck berry is high in antioxidants; and pine nuts are a rich food that helped keep the people alive and strong during the harsh Great Basin winters.

Smokey passed around samples of the plants and demonstrated traditional tools, including hand-woven baskets and grinding stones, while Dewey pronounced their names in her native tongue. Students nibbled the red buck berries from a branch, felt pine pitch between their fingers and tested an elderberry branch as a clapper stick, with a sharp thwack against a hand or thigh.

“Our food is our medicine.

I just want you to know that we came after the plants,”

Smokey said. “They were born already knowing what their job is.” “They listen to Creator.

They know.”

Although the plants intrinsically know their purpose, she said, people do not always know, and the discovery process takes exploration. That’s why events such as the Barrick Tribal Summer Youth Career/Cultural Days can be helpful.

Charles Wadda-Martinez, visiting from the Shoshone tribe in Rigby, Idaho, said he had been considering joining the military after high school graduation but that the college fair the day before got him thinking about going to college in Idaho near his family. He also reflected on the importance of cultural education, saying that it is “important because if we don’t learn the ways our people, they might die out.”

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FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 47

GeoTemps sees job growth ADELLA HARDING Mining Quarterly correspondent‌

‌Now in its 31st year, GeoTemps professionals know first-hand the ups and downs of the mining industry as a company focused on staffing for mines, exploration companies and mining-related contractors.

“I do think we’ve seen a slow uptick, and we will see slow, continuous growth over the next couple of years,” said Sarah Lightner, director of client operations for the Reno-based company and its offshoot, GeoPros Inc., that recruits professionals for clients.

“There is a lot of exploration going on, and operators moving into production,” she said, Yet she cautioned that mining employers are more careful with their money and hiring more

slowly after experiencing a downturn in gold prices. The jobs in demand include electricians, millwrights, welders and equipment operators. There also is a demand for geologists.

GeoTemps felt the mining boom in 2011 when the gold prices skyrocketed, and then experienced the downturn when the gold-mining industry slumped.

However, the company is better prepared now for downturns.

“We’ve had big success in the industrial market,” Lightner said. “The industrial sector exists because of mining.”

GeoTemps can help workers find jobs in the manufacturing industry using the skills they would use in mining, for example.

These include electricians, welders and millwrights.

“Hard-rock mining was how we

GEOTEMPS‌

GeoTemps Inc. Director of Client Operations Sarah Lightner, left, and President/CEO Lance Taylor, right, introduce corporate and geologic artifacts to a visitor at the company’s Reno headquarters. got started,” Lightner said, adding that the company’s spread can include environmental jobs, work in renewable energies and oil and gas, as well as employment with contractors that go to the mines.

“We’re very flexible. We don’t just work with the mines themselves.”

Gold prices went from a London afternoon fixing price of $1,895

an ounce in September 2011 to $1,049.40 an ounce in December 2015, according to Kitco. The price has been in the $1,250-$1,290 range since this spring.

With technology and branch offices, GeoTemps and GeoPros can help clients across the country, See GeoTemps, 48

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GeoTemps From 47

Mexico and Canada. In Nevada, the company has offices in Elko, Ely and Winnemucca, as well as the headquarters in Reno. There also are branches in Fairbanks, Alaska; Tucson, Arizona; and Saskatchewan, Canada.

“We are able to have a bigger reach without being right there,” Lightner said. “We’re very mobile. We want to give our best assistance to our clients. We are open to going to a site.”

GeoPros

Although GeoTemps has been around 31 years, GeoPros was started more recently.

“GeoPros handles direct recruitment and placement,” Lightner said, including for chief executive officers and managers. “GeoPros helps people market themselves.”

GeoTemps provides temporary staffing for jobs and does payroll

and human resources services.

Clients come to the agency to fill job slots for what may become full-time jobs later or for seasonal jobs and temporary projects.

“To employ someone is expensive,” Lightner said.

If a client hires a GeoTemp worker as a full-time employee of the client, Lightner said GeoTemps considers that a success.

The company has a large database built up over the years.

Companies call GeoTemps after layoffs, and representatives attend job fairs.

The late Lyle Taylor founded GeoTemps in 1986 in Ely, and his son, Lance, is the president and CEO. The company has 20 to 25 employees.

“We look at this way. We are a small family operation with a large footprint,” Lightner said.

She said GeoTemps keeps up with what is happening in the mining industry and is involved with mining organizations and universities, including providing scholarships. GeoTemps also works to find jobs for those coming out of the military service.

“We really get out there and build our network of people,” she said. “That’s probably what makes us so successful.”

GeoTemps has been a part of the Nevada Mining Association for many years, and for the convention this month will provide the plaques for all the mine safety winners for presentation.

“We do it because it is something we believe in,” Lightner said.

Lance Taylor is a member of the University of Nevada, Reno’s Mackay School of Earth Sciences and Engineering Executive Advisory Board. He established the Gordon C. Frisby Excellence in Safety Innovation Award that goes to students whose academic work supports safe methods and practices in a mining or geotechnical environment. Frisby was a safety engineer for Kennecott Copper Corp. who helped the Robinson Mine near Ely receive a top national safety award in 1972.

“The Mackay School has strongly promoted the necessity of mine safety at a scientific level through the Department of Mining Engineer,” Taylor said at

a Frisby award presentation earlier this year.

GeoTemps also was recognized on the floor of the U.S. Senate last year for its support of the mining industry. U.S. Sen. Dean Heller, R-Nev., called upon his fellow senators and Nevadans to join him in honoring GeoTemps.

“I am proud to honor GeoTemps’ significant contributions to the mining industry in the state of Nevada, throughout the nation, and across the globe,” Heller said at the time, congratulating the company on its 30th anniversary.

Taylor received a signed copy of the Senate transcript at the American Exploration and Mining Association convention last December.

“Our corporate family is deeply honored by this recognition,” Taylor said. “We are proud to support economic growth and corporate sustainability, and we look forward to promoting necessary industry, and necessary industrial careers, for generations to come.”

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Priest Electric serves mining industry in Nevada ADELLA HARDING Mining Quarterly correspondent‌

ADELLA HARDING/MINING QUARTERLY‌

‌I f a mine pump goes out, motor breaks down or ventilation fan stops, Priest Electric personnel hits the road for a rescue.

“We’re a 24-7 operation,” said Mike Smith, one of two Priest Electric representatives in Nevada. “A lot of times, people are in a pinch. They have to have production. We jump through hoops of fire.”

To help a mine restart production after an equipment emergency, Smith might drive four hours to a customer’s location, load a bad pump or other piece of equipment onto his gooseneck trailer, and call the Priest Electric shop in Caldwell, Idaho,

Priest Electric employees visit at the 2017 Elko Mining Expo on June 8. From left are: Patrick Weaver of L&H Industrial, Mike Smith, Pat Bicandi and Greg Priest.

See Priest, 52

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52 • MINING QUARTERLY, Elko, Nevada FALL 2017

Priest From 50

to arrange a fix.

“We switch trailers,” said Smith, who racks up about 100,000 miles a year.

While serving Nevada-based mines, the trailer exchanges often take place at McDermitt in northern Humboldt County at the Oregon border or at Riddle, Idaho, just over the border from Elko County on Mountain City Highway. Priest Electric crews rush to repair the equipment.

Services Smith also switches trailers for jobs that aren’t emergencies.

Priest Electric focuses on the pumps, motors, gear boxes and ventilation fans necessary to keep mineral production on track. The Idaho-based company specializes in rebuilding pumps, electric motors and ventilation fans used in underground mines.

For a rebuild, Smith talks with the electrical or mechanical planner or supervisor on a mine site then Priest Electric develops a quote.

“Generally speaking, if we rebuild, there will be a savings for them, and we provide the same warranty as a new one comes with,” Smith said, explaining a rebuild can save up to 50 percent.

Priest Electric also sells new equipment and parts, and can find rare motors for mines.

“On a mine site where there is a mill, they could have up to 2,000 motors — or greater,” Smith said. “We do all the rotation equipment,” explaining that motors Priest Electric services can range from 25 horsepower to 5,000-plus horsepower.

Smith, a former Elko Police Department chief, travels from his Elko home to Nevada mines in his role with Priest Electric.

He said he has visited Barrick Nevada and Newmont Mining

PHOTO COURTESY OF PRIEST ELECTRIC‌

Mike Smith, with Priest Electric in Nevada, secures a load on Aug. 11.

Corp. operations; Jerritt Canyon Mine north of Elko; Kinross Gold Corp.’s Round Mountain Mine; and Klondex Mines Ltd.’s sites, including Midas and Hollister in northern Elko County, Fire Creek in Lander County and Aurora near Hawthorne. He also goes to Albemarle Corp.’s lithium mine near Tonopah and the Scorpion Mine in Nye County.

The other Priest Electric representative in Nevada, Pat Bicandi, also works out of Elko.

Outside of the mining industry, Priest Electric serves farms in Fernley, Ely and Eureka that use pivots for irrigation. The

company also serves Idaho and Oregon.

Because the mining business can be volatile, the company does about half of its business with mines and the other half with food-processing plants and agriculture, said Greg Priest, chief financial officer for Priest Electric.

Family business Priest Electric began working with Nevada mines in the 1980s.

“We’ve always valued our long-term customers in Nevada.

We understand that in processing, time is money,” Priest said.

The family-owned business

started in Caldwell, Idaho, in 1955. Owner Earl Priest started the business with his late father, Mel, in 1955. Greg Priest is Earl’s son, and another son, David Priest, is the shop manager. The Caldwell location, where the company has been for 35 years, includes a main repair facility and a warehouse.

“It’s a family-run business started by my grandfather. The family actually came out in the gold rush at Idaho City, so my ancestors are miners,” Greg Priest said. “We’ve grown over the years. It’s been steady growth.”

The company has 25 employees, and Greg Priest said some of the employees have been with the company 40 years. Priest Electric, which recently earned a third-party certification for motor repairs from the Electric Apparatus Service Association also is training young people as mechanics, although Greg Priest said not as many younger people are interested in becoming mechanics.

“There isn’t a motor school to send someone to, so we have to train on the job,” he said. “We’ve got three young guys now we work closely with.”

The company had a shop in Reno in 1990, but Greg Priest said he couldn’t sustain it because of the ups and downs of the mining industry. Priest Electric also has considered a shop in Elko, but he said labor costs and construction costs are too high for the company to keep its competitive pricing at this time.

He said usually there are about two truckloads a week to swap from Nevada to bring equipment to Caldwell for repairs and rebuilding.

“We’re relatively close in outWest terms,” Greg Priest said.

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Above Yerington, a mile-long open pit remains at the defunct Anaconda Copper Mine. The site, already designated a Superfund, is being considered for the U.S. Environmental Protection Agency’s National Priorities List, but the state recently asked for deferral. See related story Page 55.

SUZANNE FEATHERSTON

NV on EPA proposal SUZANNE FEATHERSTON sfeatherston@elkodaily.com

Citing an unnecessary burden on the mining industry, Nevada’s elected officials asked the Environmental Protection Agency to eliminate a proposed rule that would require owners and operators of hardrock mining facilities to demonstrate financial responsibility. Proponents of the rule call it long overdue.

The previous presidential administration proposed the rule, “Financial Responsibility Requirements Under CERCLA Section 108(b) for Classes of Facilities in the Hardrock Mining Industry,” which would amend rules for the federal Superfund, established in 1980 to clean up uncontrolled or abandoned hazardous-waste sites and other hazards to the environment. The goal is to “increase the likelihood that those owners and operators will have funds necessary to address the CERCLA liabilities at their facilities, thus preventing the burden of cleanup from falling to other parties, including the American taxpayer,” according to an EPA rule summary.

In a letter sent February, Sen. Dean Heller (R-Nev.) urged the

EPA to extend the public comment period and further review the effect the rule would have on the mining industry. The EPA responded by extending the comment period from 60 to 120 days, ending July 11. Gov. Brian Sandoval in April also wrote to EPA Administrator Scott Pruitt expressing concern over the proposed rule.

Taking advantage of the additional time, Heller and colleagues outlined issues with the proposed rule in a July letter, which calls the proposal “unnecessary and duplicative and exceeds EPA’s authority under the law.”

Heller stated that the proposal improperly relies on legacy contamination, which he maintains is outside what Congress directed the EPA to address under the section, and fails to take into account the degree and duration of the risk. He also cites a Senate Committee on Environment and Public Works report that found facilities already to be covered by another financial responsibility act. Heller warned about the consequences should the rule pass.

“The cost of compliance with this unlawful and duplicative federal program will discourage

domestic mineral production and stymie future investment and development opportunities, leading to greater import reliance for metals and minerals, and putting the United States domestic manufacturing, energy, and national security sectors at a major disadvantage,” he wrote.

“Furthermore, this rule will have substantial adverse impacts to local communities who depend on the high-paying family-wage jobs and tax revenues supported by the industry.”

Great Basin Resource Watch joined a group of rule supporters nationwide, including the Sierra Club, to write to the EPA last summer, expressing support for “rigorous regulations under CERCLA 108(b) to ensure that funding is available for clean-up of hazardous materials at mine facilities.”

Sandoval wrote that the rule would duplicate or preempt Nevada’s financial responsibility programs, which he deemed the best in the nation to minimize risk and ensure remediation when necessary.

“As required by those programs, Nevada mining companies collectively hold billions of dollars in financial assurance

instruments required by the State, and/or by the federal land management agencies to cover reclamation, closure, and spills and releases during operations,” he wrote. “EPA has not fully understood and taken into account existing mining regulations and financial assurance requirements imposed by states and sister federal agencies, nor has any member of the rulemaking team ever visited a hardrock mine … .”

GBRW Director John Hadder said better assurances are needed nationwide.

“Nevada does have better financial assurance regulations than probably most other,” he said. “GBRW sees the EPA regulation development as an opportunity to review what we have in Nevada and make any improvements. … Assuming that flexibility is built into the final rule, mining companies will most likely not see a significant increased financial burden and mining operations will largely be unaffected in Nevada.”

A final rule would be published in the Federal Register in December.

FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 55

State: Defer Anaconda mine’s priority listing SUZANNE FEATHERSTON sfeatherston@elkodaily.com‌

‌The Anaconda Copper Mine site in Lyon County might not get put on the Superfund National Priorities List, if the U.S. Environmental Protection Agency grants a state request. The Nevada Division of Environmental Protection sent a letter to the EPA asking for a deferral while it pursues an agreement with Atlantic Richfield Co. If granted, the site would not receive funds from the federal Superfund program – responsible for cleaning up contaminated U.S. lands – and the state of Nevada would take responsibility for the cleanup process.

The NDEP and Atlantic Richfield Co., the responsible party, are negotiating terms to assure a plan for funding and the

implementation of a remedy, as well as investigations and studies, the July 31 letter states.

“NDEP and ARC have made considerable progress in negotiating such an agreement,” the division wrote.

Earlier this year, the EPA outlined the criteria required to make a determination about deferment, and the NDEP plan addresses the key points: assure that the remedial investigation, feasibility study and remedy are similar to a Superfund response; that enforcement mechanisms are in place; that Natural Resource Trustees’ rights are preserved; and tribal involvement is supported.

The request comes after meetings with affected and concerned parties, including representatives from Paiute tribes, City of Yerington, Lyon County and the

Great Basin Resource Watch.

The GBRW raised four issues to address in the final deferment process: improve the public engagement process; have the state enforce full cleanup; maintain a commitment to aquifer restoration; and redraft a “realistic” site completion schedule, according to a GBRW press release.

“In a good recent meeting, staff from the NDEP acknowledged our concerns, and we look forward to seeing the commitments to groundwater cleanup, mine closure, community engagement, and revisiting of work plans and schedules materialize in agreement documents,” said John Hadder, GBRW director.

After two additional stakeholder meetings focused on the deferral process and concerns,

“NDEP believes that it has adequately addressed all significant and valid concerns raised by community with respect to deferral,” the agency wrote.

The more than 3,400-acre Anaconda Copper Mine site is in Mason Valley near Yerington.

Operations began in 1918 after the discovery of copper, the EPA reports. Companies involved include Anaconda Co. from 1952 to1978; and Atlantic Richfield Co. to 1982; and Arimetco Inc. starting in 1988. Arimetco Inc. went bankrupt in 1997 and abandoned the site in 2000.

The mine is already a Superfund site, which has allowed for federal investigations and removal actions since 2005, according to the EPA.

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56 • MINING QUARTERLY, Elko, Nevada FALL 2017

Industry Ingots ‌SSR Mining is the new name of Silver Standard Resources effective Aug. 1, and the designation is intended to more accurately reflect the company’s business focus. Shareholders of the Canada-based precious metals producer approved a resolution May 4 to change the company name. The domain name changed to www.ssrmining. com. Shares traded on the NASDAQ Capital Markets and the Toronto Stock Exchange under the updated SSR Mining ticker symbol “SSRM” as of Aug. 3.  NewFields plans to consolidate its two Elko locations into one after the construction of an

office building at 2229 N. Fifth St. The civil and geotechnical consulting firm broke ground on a 4,100-square-foot office and warehouse facility July 25.

NewFields is an international multidisciplinary environmental consulting firm with more than 5,000 projects completed in 70-plus countries. The Elko office opened in 2012, drawn by the mining industry.  In 2017, U.S. Gold Corp. completed the staking of 102 additional claims for Keystone Project on the Cortez Trend in Nevada, according to a press release. The additional claims

9326 East Idaho Street Elko, NV 89801 Tel: + 1 775 738 7386 Fax:+ 1 775 738 7432 www.liebherr.com

See Ingots, 60

Mining news briefs

SUZANNE FEATHERSTON

NewFields and Kelly Builders broke ground at the company’s Fifth Street site July 25. From left are NewFields’ Tony Sears, Kevin Engelmeier, Joe Kingston, Kerry Magner, Lisa Olson, Ryan Fesler and Kevin Lutes; and Kellly Builders’ Matt Burwell and Wade Kelly.

58 • MINING QUARTERLY, Elko, Nevada FALL 2017

Reflecting our drive to maximize the productivity and efficiency of our operations, we have completed the unification of our Cortez and Goldstrike operations, and we are accelerating the implementation of our digital transformation in Nevada, which will support unit cost improvements, increased throughput, and expanding margins.

— Barrick Gold Corp.

Barrick second quarter report Net earnings top $1B ‌Barrick Gold Corp. reported second quarter results, including net earnings of $1.084 billion, and announced the acquisition of property adjacent to Cortez, southwest of Elko.

“Our portfolio delivered higher gold production and a 10 percent decrease in direct mining costs compared to the prior-year period, resulting in lower cost of sales and all-in sustaining costs for the second quarter,” the corporation stated in a news release. “A number of factors contributed to lower cash flow over the same period, including higher cash taxes paid, an increase in working capital, and a planned increase in capital expenditures focused on sustaining and growing the value of our operations over the long term. We expect higher cash flow in the second half of the year as a number of these factors abate.”

Highlights of the second quarter report include operating cash flow of $448 million; gold production of 1.432 million ounces at a cost of sales applicable to gold of $726 per ounce and a reduction in debt by $309 million. The corporation also announced the continuation of normal leaching operations in Argentina, the formation of a partnership with China-based Shandong Gold and the beginning of discussions with the Tanzanian government regarding an export ban.

“Reflecting our drive to maximize the productivity and efficiency of our operations, we have completed the unification of our Cortez and Goldstrike operations, and we are accelerating the implementation of our digital transformation in Nevada, which will support unit cost improvements, increased throughput, and expanding margins,” the report states.

Q2 Highlights Operating cash flow of $448 million Gold production of 1.432 million ounces Reduction in debt by $309 million “By applying strict capital discipline, leveraging innovation and digital technologies, and building distinctive partnerships, we are positioning Barrick to grow free cash flow per share over the long term. We continue to advance a deep organic project pipeline that provides our owners with exceptional leverage to gold prices, built on a foundation of core mines that are among the longest-life, lowest-cost gold operations in the industry.”

Optimization

On June 8, Barrick completed the acquisition of the Robertson property and other claims in Nevada from Coral Gold Resources. The Robertson property is adjacent to Cortez, located about 3.7 miles north of the Pipeline mill. If successfully brought into production, ore from the project would provide an additional feed for the Cortez mill, with the potential to extend open pit operations in the Cortez District. Robertson also has processing synergies with the Deep South underground expansion project at Cortez.

In addition, the land package contains a number of promising near-mine exploration opportunities, as well potential new exploration targets in the district.

Financials

Second quarter net earnings were

$1.084 billion compared to $138 million in the prior-year period. This significant increase in net earnings was primarily due to $882 million in gains related to the sale of a 50 percent interest in the Veladero mine, and the sale of a 25 percent interest in the Cerro Casale project in Chile.

Adjusted net earnings for the second quarter were $261 million compared to $158 million in the prior-year period.

Higher adjusted net earnings were primarily the result of a 10 percent decrease in direct mining costs, driven by lower costs at Barrick Nevada and Pueblo Viejo in the Dominican Republic, higher sales from its low-cost operations at Barrick Nevada, and lower relative sales from Acacia, Tanzania, and Turquoise Ridge, northeast of Winnemucca, compared to the prior-year period. Higher gold and copper sales volumes and higher copper prices also contributed to stronger adjusted net earnings. This was partially offset by an increase in tax expense, higher depreciation, and an increase in exploration and evaluation costs.

Significant adjusting items (pretax and noncontrolling interest effects) in the second quarter of 2017 include: • $689 million in a gain relating to the sale of a 50 percent interest in the Veladero mine; • $193 million in a gain relating to the sale of a 25 percent interest in the Cerro Casale project;partially offset by • $32 million in foreign currency translation losses primarily related to the devaluation of the Argentine Peso on VAT receivables; and • $26 million in losses on debt extinguishment.

Operating cash flow was $448 million, compared to $527 million in the second

FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 59 quarter of 2016. Lower operating cash flow was primarily due to higher cash taxes paid at Pueblo Viejo. During the quarter, Barrick made its final 2016 tax payment in the Dominican Republic, in addition to its first tax payment for 2017.

Based on current estimates, this should result in nominal tax payments at Pueblo Viejo for the remainder of the year. Operating cash flow was further impacted by the concentrate export ban affecting Acacia’s operations , an increase in working capital primarily related to leach pad inventories at Veladero, and an increase in exploration, evaluation, and project costs.

These decreases were partially offset by higher gold and copper sales volumes and higher copper prices, combined with lower direct mining costs.

Free cash flow for the second quarter was $43 million, compared to $274 million in the second quarter of 2016. The decrease primarily reflects higher capital expenditures, combined with lower operating cash flows. On a cash basis, capital expenditures for the second quarter were $405 million, compared to $253 million in the second quarter of 2016. This primarily reflects a planned increase in mine site sustaining capital expenditures at Barrick Nevada, relating to higher capitalized stripping costs and the timing of minesite sustaining projects in the current period, as well as greater spending at Veladero relating to phase 4B and 5B of the leach pad expansion and equipment purchases.

The increase in capital expenditures also includes a $31 million increase in project capital, primarily at Barrick Nevada. This includes the acquisition of the Robertson in Lander County, development of Crossroads and the Cortez Hills Lower Zone, and the Goldrush project, near Cortez Hills, partially offset by a decrease in preproduction stripping at the Arturo pit, which entered commercial production in August 2016.

Debt

Achieving and maintaining a strong balance sheet remains a top priority. Barrick stated that it intends to reduce its total debt from $7.9 billion at the start of 2017, to $5 billion by the end of 2018—at least half of which it are targeting this year. The corporation plans to achieve

Our portfolio delivered higher gold production and a 10 percent decrease in direct mining costs compared to the prior-year period, resulting in lower cost of sales and allin sustaining costs for the second quarter.

— Barrick Gold Corp.

this by using cash flow from operations, further portfolio optimization, and the creation of new joint ventures and partnerships. Barrick plans to continue to pursue debt reduction with discipline, taking only those actions that make sense for the business, on terms considered favorable to its shareholders.

Barrick reduced its total debt by $309 million in the second quarter, or a total of $487 million year to date. On June 30, the Barrick completed the sale of a 50 percent interest in the Veladero mine in Argentina to Shandong for $960 million, which will be allocated to debt reduction.

At the end of the second quarter, Barrick had a consolidated cash balance of approximately $2.9 billion. The company has less than $200 million in debt due before 2020. About $5 billion, or twothirds of its outstanding total debt of $7.4 billion, does not mature until after 2032.

Operations

Barrick produced 1.432 million ounces of gold in the second quarter at a cost of sales 3 of $726 per ounce. This compares to 1.340 million ounces at a cost of sales 3 of $836 per ounce in the prior-year period.

After removing noncontrolling interests, cost of sales declined by 13 percent on a per-ounce basis compared to the second quarter of 2016, primarily driven by a 10 percent reduction in direct mining costs, and higher ounces sold.

All-in sustaining costs in the second quarter were $710 per ounce, compared to $782 per ounce in the second quarter of 2016. A 9 percent reduction in AISC was primarily driven by lower cost of sales per ounce, combined with lower general and administrative expenses, partially offset by an increase in mine site sustaining capital expenditures. Cash costs

also decreased by 18 percent, from $578 per ounce in the second quarter of 2016, to $474 per ounce in the second quarter of 2017.

Barrick stated that it continues to expect full-year gold production of 5.35.6 million ounces, at a CAS of $780 to $820 per ounce, and AISC of $72 to-$770 per ounce.

The company also stated that it expects production for the remainder of the year to be weighted towards the fourth quarter.

Based on sales mix and current expectations for the timing of capital expenditures, Barrick expects costs to be higher in the third quarter.

The company produced 104 million pounds of copper in the second quarter, at a CAS of $1.85 per pound, and all-in sustaining costs of $2.38 per pound. This compares to 103 million pounds, at a CAS of $1.43 per pound, and AISC of $2.14 per pound in the second quarter of 2016.

CAS applicable to copper increased by 28 percent compared to the prior-year period, primarily due to higher depreciation expense, and higher power and processing costs at Lumwana in Zambia.

Copper AISC, adjusted to include a proportionate share of equity method investments at Zaldívar in Chile and Jabal Sayid in Saudi Arabia, were 10 percent higher in the second quarter. This primarily reflects the higher CAS applicable to copper combined with higher mine site sustaining capital expenditures at Jabal Sayid, which only began incurring sustaining capital expenditures upon entering commercial production in July 2016, as well as higher capitalized stripping at Lumwana.

Barrick stated that it continues to expect full-year copper production of 400-450 million pounds, at a CAS of $1.50-$1.70 per pound, and AISC of $2.10-$2.40 per pound.

As part of Barrick’s ongoing efforts to increase transparency and strengthen disclosures, the company said it intends to prerelease production and sales figures ahead of quarterly earnings releases, beginning in the third quarter of 2017.

60 • MINING QUARTERLY, Elko, Nevada FALL 2017

Ingots From 56

make up 2,000 acres and bring the company’s total mining claims to 479. The company subsequently increased its opportunity at its Keystone asset with acquisition of the adjacent Gold Bar North gold exploration property.  At the 2017 Newmont Contractor Safety Summit June 29, Small Mine Development Safety Superintendent Dwight Stoneman introduced Kevlar-sleeved shirts from Idaho Mining Apparel, which has protective sleeves to deflect cuts attached to work shirts. Kevlar sleeves, attached to heat-stress shirts, are cut-resistant and worn with protective gloves by mechanics, electricians and employees who work with self-retracting knives.

TONI R. MILANO‌

Small Mine Development Safety Supervisor Dwight Stoneman shows Kevlar sleeves sewn into a SMD company work shirt. The invention was introduced at the 2017 Newmont Contractor Safety Summit.  McEwen Mining Inc. purchased the Black Fox Complex in Timmins, Canada, from Primero Mining Inc. for $35 million, according to a press release. The company announced the agreement Aug. 10. Chief owner Rob McEwen calls the purchase the

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Tucker Morgan, fourth-generation member of the company’s founding family, Tyler de Haan of Hughes, Elko Mayor Chris Johnson, Hughes CEO Scott Hughes and Kenworth District Manager Mike McKay. beginning of a new chapter of project in Nevada. growth. He estimated the mine  will produce 50,000 to 60,0000 Kenworth Sales Co. plans ounces of gold in 2017. McEwen to more than quadruple its Elko Mining also owns the Gold Bar shop and warehouse space,

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FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 61

SUZANNE FEATHERSTON‌

Two jumbos line the front yard of Thyssen Mining’s first Nevada office location, opened in March. and create new jobs after constructing a facility on Ruby Vista Drive. The 72-year-old company broke ground on the 18,000-square-foot store July 25 and expects construction to be completed mid-May 2018.

The facility will house eight service bays, employ 16-20 employees, create about six jobs and increase warehouse space to 6,000 square feet. Plans also include conveniences for truck drivers and a drivers’ lounge with internet access.  Assay results from five new holes drilled at Winnemuccabased P a r a m o u n t G o l d N e v a d a C o r p. ‘s Grassy Mountain Project confirm the consistency of the grade and thickness of the gold mineralization for economic underground mining, the company reported Aug. 2. The 30-hole drill program is part of a preliminary feasibility study that Paramount is undertaking for construction and operation of an underground mine in Oregon. All five holes reported good widths of higher-grade material suitable for underground mining. 

Prophecy Development Corp. acquired the Louie Hill vanadium project, the Canadian company reported July 13. The project, about 25 miles south of Eureka, features 10 unpatented lode claims totaling 207 acres. Prophecy also recently acquired through lease in Eureka County the Gibellini Project, planned to be an open pit, heap leach project on 826 acres. Vanadium is being used in utility-scale battery storage technology.  Thyssen Mining opened an office in Spring Creek. The Elko County location is the underground contractor’s first Nevada site. The facility opened this spring at 377 Sunshine Lane and features an office, warehouse and shop buildings. Project manager Glenn Jacobson leads the local team of engineers, mechanics, electricians and labors. Thyssen’s contracted projects in Nevada include work at Barrick Gold Corp.’s Leeville and Turquoise Ridge mines, and Newmont Mining’s Exodus mine, Jacobson said.

62 • MINING QUARTERLY, Elko, Nevada FALL 2017

Comstock Mining reports lower costs SUZANNE FEATHERSTON sfeatherston@elkodaily.com‌

‌Comstock Mining,the Nevadabased company that owns the property in the historic Comstock District near Reno, reported record-low costs and hinted at upcoming strategic ventures in third quarter results released Aug. 1.

The news comes in the wake of the company’s refinancing in January, followed by a year of activities designed to “enhance liquidity, accelerate mining activities and strengthen and grow land position and reduce costs,” said Corrado De Gasperis, executive chairman and CEO of Comstock Mining, in a news release.

With general and admi-

nistrative costs down to $1.6 million, a cash balance of $1 million and long-term debt at $11.4 million, the company is proceeding cautiously.

“We really want to make sure we have the wherewithal to accomplish everything we are setting out to do,” De Gasperis said during a results and business update conference call with investors. “We are working extremely hard to have the lowest possible cost platform to be in that position and not waste a dollar.”

During the call, De Gasperis focused on updating investors on three major projects then took questions from investors, who inquired about issues such as real estate, communications and what happened that led to

the need to refinance.

At the Lucerne Resource Area, the company is assessing economic feasibility, and establishing proven and probable reserves and production plans. De Gasperis said the company is on the verge of a joint venture that could accelerate development at that site. He said Comstock Mining hopes to make an announcement of an agreement later this year.

Comstock Mining also entered a partnership to begin metallurgical testing on mineralized materials to assess the potential for additional silver extraction from leach pads at the Lucerne Resource Area, where 40 percent of the product remains.

“This project is really designed to see if we can get a meaningful amount of that silver out,” De

Gasperis said. “If it is successful, it means we’d be extracting silver again in the reasonably near future, but it’s still being tested with our ores.”

For processing on gold and silver yields, Comstock Mining has entered a joint collaboration agreement to test an alternative extraction technology. Material from the Lucerne Resource Area and Dayton Resource Area, in Lyon County, has been provided for this project.

In a collaboration with Cycladex, technical staff conducted column tests using cyanide and noncyanide solutions to advance the feasibility study for reserves at the Dayton Resource Area.

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FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 63

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Comstock Mining CEO Corrado De Gasperis in 2014 Science Foundation funded the simulations.

Other efforts discussed included two additional joint venture prospects, which must remain confidential until signed; efforts to put the Dayton Resource Area into production in the next two years; and the economic development of Northern Nevada, leading to favorable conditions for the sale of Comstock Mining’s nonmining lands.

The state’s completion of transportation infrastructure and area growth surrounding Tesla Inc., Google Inc. and Apple Inc. could lead to sales of Comstock Mining property. “It would be impossible for me to exaggerate the amount of activity,” De Gasperis said. “We couldn’t be more pleased with the economic activity around us, so we are looking forward to getting some sales done. We are looking forward to being debt free.”

On the call, one investor asked how Comstock Mining is sharing information to garner interests in stocks and perhaps improve market performance.

De Gasperis said the company is working to get the message out in a constructive way. “The Comstock fame is for massive history,” he said, “but we want people to understand there is some real current, real modern,

stuff happening right now and it’s positive.”

Another caller, a self-proclaimed longtime investor with ingots from Lucerne’s first gold pour, said he was embarrassed to ask why Lucerne was no longer producing. But he did ask: “What happened?”

De Gasperis said Comstock Mining tried to transition the mine from surface to underground. “That got more complex and more difficult than we expected it would be. It also built two major underground tunnels that positioned us remarkably well for the next round of drilling and development. But we pushed ourselves hard to make that transition and strained our capital resources to do it,” he said. “It’s there. It’s just how. I think it’s a question of how you do it.”

In summary, De Gasperis conveyed determination to keep going. “We are marching toward gaining feasibility come hell or high water,” he said. “I really appreciate the patience, but it is now happening.”

Near the end of the conference call, one investor offered this encouragement: “Keep it going.

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64 • MINING QUARTERLY, Elko, Nevada FALL 2017

Newmont reports net income ‌N ewmont Mining Corp. announced second quarter 2017 results that demonstrated improved operational and financial performance, reporting $192 million net income.

“Operational execution has driven superior second quarter results, further investment in profitable growth, and improved guidance for 2017,” said Gary J. Goldberg, president/CEO. The company also announced an increase compared to last year’s quarter in adjusted earnings before interest, taxes, depreciation and amortization of $98 million to nearly $700 million. Cash flow totaled $346 million, and all-in sustaining costs reduced to $884 per ounce while producing 13 percent more gold, Goldberg reported.

Projects update

In a projects update for

North America, Newmont describes Twin Underground, which is a portal mine beneath Twin Creek’s Vista surface mine with similar mineralization, and states that funding has been approved. First production of the mine is expected in the fourth quarter of 2017 with commercial production in mid-2018. The expansion is expected to average between 30,000 and 40,000 ounces per year for the first five years.

During this period, cost applicable to sale is expected to be between $525 and $625 per ounce and all-in sustaining costs between $650 and $750 per ounce. Capital costs are expected to be between $45 million and $55 million with expenditure of $15 million to $25 million in 2017, up from prior estimates due to higher production and additional

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“Operational execution has driven superior second quarter results, further investment in profitable growth, and improved guidance for 2017.”

infrastructure to support a phased approach with exploration upside. Internal rate of return is expected to be about 20 percent at a $1,200 — Gary J. Goldberg, Newmont Mining gold price.

Corp. president/CEO

Outlook

Newmont reports that its outlook reflects steady gold production and ongoing investment in its current assets and best growth prospects.

Attributable gold production guidance improved: Production guidance for 2017 improves to between 5 million and 5.4 million ounces on full potential improvements in North America and Africa. Compared to the prior year, full-year production at Merian and Long Canyon more than offsets declines at Twin Creeks and Yanacocha.

Production guidance for 2018 and longer-term guidance

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North America production guidance is improved. Production guidance for 2017 improves to between 2.1 million and 2.2 million ounces following See Newmont, 66

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Newmont From 64

changes to blend management at Twin Creeks and improved mill grade and leach volumes at Cripple Creek & Victor.

Compared to the prior year, a full-year of operation at Long Canyon offsets the impact of higher than planned stripping at Twin Creeks. Guidance is unchanged at between 1.9 million and 2.1 million ounces in 2018 and between 1.8 million and 2.0 million ounces in 2019 due to planned stripping at Carlin and continued stripping at Twin Creeks. Both sites are expected to return to higher production levels in 2020.

Gold cost

Gold cost outlook is improved.

CAS guidance for 2017 is improved to between $675 and $715 per ounce on increased production and mining and processing improvements in North America, Africa and Australia.

Guidance remains between $700 and $800 per ounce for 2018 and between $650 and $750 per ounce for 2019 to 2021, before any portfolio improvements expected through the full potential program.

AISC guidance for 2017 is improved to between $900 and $950 per ounce on CAS improvements and reduction of sustaining capital in North America, Africa and Australia. Guidance remains between $950 and $1,050 per ounce for 2018, excluding further cost and efficiency improvements.

Longer-term AISC guidance is unchanged at between $870 and $970 per ounce as increased production from Ahafo –combined with ongoing productivity, cost and capital improvements – is expected to more than offset inflation and partially counter the effects of lower grades.

North America cost guidance is improved. CAS per ounce guidance for 2017 improves to between $675 and $725 on increased production, mine plan

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improvements at Carlin and full potential cost savings at Cripple Creek & Victor and Long Canyon. Guidance remains between $750 and $850 in 2018 and 2019.

AISC per ounce guidance for 2017 improves to between $855 and $930 on lower CAS and sustaining capital. Guidance remains at between $950 and $1,050 in 2018 and between $930 and $1,030 in 2019, as a result of planned stripping at Carlin, combined with lower grades at Twin Creeks and Cripple Creek & Victor.

Copper

Together, Boddington, in Australia, and Phoenix, near Battle Mountain, are expected to produce between 40,000 and 60,000 tons of copper per year, unchanged from previous guidance. CAS guidance remains at between $1.45 and $1.65 per pound, and AISC guidance remains at between $1.85 and $2.05 per pound; higher costs at Phoenix due to lower copper grades are offset by lower costs

at Boddington due to improved mine planning and cost improvements. Longer term cost guidance is unchanged; CAS guidance remains at between $1.50 and $1.90 per pound, and AISC guidance remains at between $1.85 and $2.15 per pound.

Capital

Capital guidance for 2017 is lowered to between $890 and $990 million, including the remaining capital for the Northwest Exodus and Tanami Expansion projects, the initial capital for Subika Underground and the Ahafo Mill Expansion and Twin Underground. Guidance is unchanged at between $900 million and $1.0 billion for 2018 and between $630 million and $730 million for 2019. Sustaining capital outlook for 2017 is lowered to between $575 and $675 million and remains between $600 and $700 million per year longer term.

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FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 67

Practice what you preach But not too loudly

a journey of emotion consistent with the message I want to resonate long after I’ve left the stage or training room. This am passionate about what I do and cannot be done if I am overzealous in my what I believe, especially safety. At approach. The same is true for any safety times, I even “get on a soapbox.” At manager or supervisor who is trying to these times, I have been “preach” safety to his or her crew or orgalikened to a caricature of a Baptist preacher leading an nization.

Zealous is defined as being “full of impassioned congregation.

In the context of safety talks or characterized by fervor for a person, object, or cause.” And, while “fervor” is that are often described not a bad thing, an over-dose of it can be. as monotone and boring, THOMAS E. this can be refreshing, In fact, to be overzealous can cross the BOYCE boundary into “dogma,” which is often but for some, it could be perceived as “prescribed doctrine proa turn-off. Thus, as I’ve claimed as unquestionably true by a parmatured in my career, I have been trying ticular group.” In my experience “dogma” to show this passion differently, while still maintaining authenticity, energy and implies right versus wrong. However, appropriate humor that are demonstrative little in the safety world is quite that cut of my passion for what I believe and most and dry. As a result, when our zeal is seen as dogma, we create a defensive often know to be true. Like a finely tuned response in our “audience” as a natural symphony, I want to take the listener on

I

“Indeed, when our passion properly shines, it can compel or ‘convert’ people to our point of view.”

— Thomas E. Boyce, Ph.D.

byproduct of people’s desire to maintain consistency in their thinking and protect their self-esteem. This is particularly true of those who don’t see “eye-to-eye” with your point of view. Being overzealous and dogmatic might work with those “in the choir,” but, it rarely converts people.

By contrast, we should be passionate about what we believe. This passion can be an asset, especially when built on a foundation of “caring.” Passion is defined as: “any powerful or compelling emotion or feeling.” Given that a majority of people make decisions emotionally and then See Boyce, 68

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68 • MINING QUARTERLY, Elko, Nevada FALL 2017

Boyce

for others that persuades better than logic or dogma. In the end, passionate people who care are willing to go through a process From 67 to test out what they have learned. They back up these decisions with logic, showing also embrace a philosophy of continuous passion for what you believe has its benefits improvement. Zealots tend to jump on the next bandwagon about which they get in convincing others to accept and even excited without engaging in a process to start to believe the same. Indeed, when obtain deep knowledge about the subject. our passion properly shines, it can compel As a result, zealots are most often tempoor “convert” people to our point of view. rarily committed, abandoning what they When this passion comes from a foundabelieve today for the “next best thing.” tion of caring, we demonstrate “compassion,” which is defined as: “concern for the Passionate people are long-haulers. Compassionate people are long-haulers who sufferings or misfortune of others.” In the case of safety, this is manifest as an antici- care. This is something to think about the pated concern that others might suffer as a next time you give a safety talk or provide result of not “buying into” or accepting our feedback in the field that is intended to help someone avoid injury or death. message of injury prevention.

I have maintained a successful BehavWhat’s the differentiator? It’s the source ior-Based Safety consulting business for of motivation for the message. Those more than 20 years. In that time, many who preach safety out of “self-interest,” mining companies have jumped on and off or a desire to ensure compliance with the the Behavior-Based Safety bandwagon in rules to keep regulators at bay, tend to be search of the next best thing. Those with dogmatic. Those who share the message whom I remain in contact that have stayed because they care about people (because it the course continue to perform in safety is people that make the organization successful) are compassionate. It is compassion (and even other areas of their operations)

much better than the industry averages.

Those who have abandoned the approach see much more variable performance when measured objectively. How does your mine site’s safety performance stack up? Please send me feedback at the email address below.

Thomas E. “Ted” Boyce, Ph.D., is a professional speaker, educator, author, and business coach. He is president and senior consultant with the Center for Behavioral Safety, LLC. Boyce has been providing cost-effective safety and culture change training to the U.S. mining, manufacturing and construction industries for more than 20 years. His online short course, Motivating Safety at Work, is available at: www.udemy.com/motivating-safety-at-work. Visit www.culturecheckup.com to better understand your work culture. Contact Dr. Boyce directly at ted.boyce@cbsafety.com or find him LinkedIn, Twitter and Facebook. Adria Pulizzano contributed to this article. ‌

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FALL 2017 ELKO DAILY FREE PRESS, Elko, Nevada • 69

“Why invest in gold? Because it will never be worth nothing, unlike some other financial assets. That doesn’t necessarily mean it is a good investment.”

— John Dobra, mining consultant

Gold investment myths

F

or a few years now, the public hasn’t focused much on gold prices, and I haven’t written about it in these articles. However, the recent sabre-rattling in the Korean peninsula has the price seeming to make a run at $1,300 per ounce, and there is renewed interest. So let’s have a look at gold prices, gold as an investment and investments in precious metals in general.

We have all probably seen the ads on TV JOHN DOBRA advertising gold and silver coins and bullion and have probably wondered if we are being scammed or if this is something we should take seriously. In the interest of full disclosure, I do own some gold and silver coins and bullion but not a lot as percentage of my retirement savings – probably less than 0.0001 percent. I think it is prudent to hold some of these “hard” assets because their value is unlikely to ever be zero. I also own stocks in precious metals mining companies, which I think are a much better investment than bullion.

I’ve also dabbled in speculation in exchange-traded funds, or ETFs. My stepfather was gung-ho on buying silver.

So after he badgered us, we each bought into a silver ETF with the price at $8 per ounce.

When he passed away several years, later the price was $32 per ounce. When my mom got the

brokerage statement, she asked me what do, and I immediately said, “Sell it!” It’s a big casino, out there and it’s better to be lucky than good. (The current price is around $17.) I’ve also lost money on gold stocks, so I don’t have the formula for success.

So let’s look at the record and some myths about gold. A chart from kitco.com shows the average annual price of gold since 1995 and, even if gold does hit $1,300 per ounce, it is still well below its price in 2010. If you had bought gold in 1980 at $850 per ounce, you still would have lost money in inflation-adjusted terms. The stock market (and even U.S. Treasury bonds) would have made you a far greater return on investment (and in the case of Treasuries, at least something).

Why invest in gold? Because it will never be worth nothing, unlike some other financial assets. That doesn’t necessarily mean it is a good investment.

Let’s look at some myths and realities about gold as an investment.

Myth: Gold is a good investment in times of war, national emergencies and natural disasters.

Reality: This is sort of true but needs qualifications. If you go back to the first Gulf War in 1991, the price of gold rose almost $100 to more than $400 an ounce in the run up to the fight. Once the public figured See Dobra, 70

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out that it was a 100-hour long war, and not much of a war at that, the price quickly retreated to the low $300 range. It was, as politicians like to say today, “a nothing burger.”

Or, take September 11, 2001: the price barely moved. I recall telling a colleague that if the World Trade Center attacks can’t get the price over $300, nothing can.

I was wrong.

Myth: What pushed gold prices up in the early 2000s was the bursting of the dotcom bubble and a temporary blip in the stock market, and the rising price of oil.

Reality: These two factors worked in different ways.

I recall speaking to a group during the dot-com bubble, and they wanted to know what

was wrong with the price of gold. Gold was stuck around $270. My answer was that there was nothing wrong with gold that a few thousand points of the Dow (stock market) couldn’t fix. Thinking of their 401(k) retirement accounts, I assume, most of them gasped.

The point is, gold is an alternate investment and when other alternates are flying high, gold won’t do well and vice versa. Remember gold prices soared after the 2008-2009 financial crash.

Regarding the price of oil, much of physical gold demand comes from the Middle East for social, political and religious reasons. I have read but can’t confirm that about two-thirds of the world’s annual output of gold disappears somewhere between Beirut and Hong Kong. India is the world’s largest importer.

The point is that when oil

Reliability

prices are high, like they were in the early 2000s, Middle Eastern incomes were rising, and they bought a lot of gold, driving up the price. There are fundament economic reasons related to supply and demand that explain gold prices.

Myth: My preferred method of betting in the gold casino is on gold stocks, BUT you need to know what you are buying.

To know what you are buying, you need to do your research. I know from experience because I’ve been burned.

Reality: I’m not giving stock tips here because I’ve learned that I can lose friends doing that, but I will explain why I hold this opinion. The simple answer is that stocks are more leveraged to the price.

In other words, if the price of gold goes up 1 percent and you own physical gold, you have a 1 percent gain. If you own stock in a gold producer (particularly

John Dobra is an associate professor of economics at the University of Nevada, Reno’s College of Business and has almost 30 years experience consulting for mining companies. Dobra is a senior fellow at the Fraser Institute, has been published in academic journals and has testified in Congress on mining issues. ‌

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A tectonic shift in markets?

t is the dog days of summer, and tensions over North Korean missiles and nukes startle a few sleeping dogs. On Tuesday, August 8, President Donald Trump delivers a sobering comment to reporters at his Bedminster golf course: “North Korea best not make any more RICHARD P. threats to the BAKER United States.

They will be met with fire and fury like the world has never seen.”

Comex gold rallies to $1,271.0 per ounce.

This ruckus doesn’t blunt copper’s summer rally as it posts prices not seen since late 2014.

Other base metals join the surge with zinc scoring a new high for the year and aluminum scaling a two-and-a-half-year peak. The ratio of copper-to-gold prices

rises to mid-2015 levels shortly after the president’s remarks.

The yellow metal’s move is sound but outpaced by its red metal companion. Very curious.

In his 2017 forecast, bond guru Jeffrey Gundlach made a prescient observation about gold, copper and 10-year U.S. Treasury note yields. Midyear, he called for those yields to be in a range of 2.7 percent to 2.8 percent by the end of the year, perhaps higher. Several hours before “fire and fury,” Mr. Gundlach appeared on the CNBC Business News. “The copper-gold ratio going up as strong as it has suggests to me yields are going to break out to the upside,” he said. In the same interview, he predicted gold was ready for a breakout above the $1,280 to $1,300 level on some catalyst — likely geopolitical.

So far, yields are still low and below the 2.4 percent tipping point identified in the interview.

By that Friday morning, Comex gold nearly touched $1,300 at $1,298.1 per ounce.

Not too many people have become rich betting against Gundlach. If you believe him, how do you fit these seemingly contrary pieces together to forecast prices for two of Nevada’s prominent metals?

are short-term maturities of a year or less. Treasury notes span a period between one and 10 years; Treasury bonds, more than 10 years. Treasury yields, or the income return from investing in those securities, affect many consumer loans, such as fixed-rate mortgages. Gundlach chooses the midrange 10-year note as a benchmark for interest The indicator rates in his comparison to gold In his forecast, Gundlach, and copper prices. founder and CEO of DoubleLine The first graph shows my Capital LP, noted that the copmodel, based on Gundlach’s per-to-gold ratio is a “fantastic” assumptions, versus actual coincident indicator of interest 10-year note yields over a tworates. I did a little research and year period. I prefer to use the built an interest rate model gold-to-copper ratio, or GCR, based on copper and gold alone. since folks out this way think He’s right! In fact, this relain “pounds of copper for a tionship has grown even more troy ounce of gold,” consistent fantastic since his forecast eight with the venerable gold-tomonths ago. silver-ratio or GSR. The results First, a little background. are unchanged except the U.S. debt obligations break into GCR bottoms as Gundlach’s three categories: Treasury bills, notes and bonds. Treasury bills See Baker, 74

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Baker From 72

copper-to-gold ratio peaks.

The error in this model is very small compared to the average yield over two years. It is the equivalent of going 76-84 mph on the new 80 mph stretch of Interstate 80, about a 5 percent wiggle. Most drivers reasonably assume that difference won’t set off State Trooper lights. When Gundlach made his RICHARD P. BAKER‌ earlier forecast, the error was a bit larger, so the relation has improved since the beginThe 10-year Treasury note has ning of the year. A good model to date; no tracked the gold-to-copper ratio. tickets for excessive error yet.

In the CNBC interview, the bond guru On the horizon offered additional insight: “When the My model can determine what the GCR copper-gold ratio is rising [i.e. GCR falling] will be given Gundlach’s future interest rate it’s incredibly suggestive that something is forecast. The second graph shows the GCR for 2017 together with projected GCR levels. going on that might be a little inflationary,” he said. “It suggests to me yields are going Note that when the 10-year yields were to break out to the upside. ... The leg up below 2.2 percent, the GCR peaked to an elevated 512 pounds per ounce. The ratio has in yields will be a catalyst of volatility in trended lower with rising yields and briefly the market.”

Returning to the I-80 analogy, volatility dipped to the 430-level after the president’s can be likened to a driver who gets tickets “fire and fury” remarks. The model suggests for excessive speed and going too slow on further ratio compression to even lower the same day. A volatile market produces levels given Gundlach’s 2.7 percent to 2.8 percent prediction; 389 and 368 pounds per price swings that are large and erratic.

Recalling 2011, copper set an all-time record ounce respectively. high in February, followed by a dramatic

crash caused by slowing China demand and U.S. debt crisis. While copper headed down the mineshaft, gold pegged its all-time record that October. That’s called a volatile market.

For months, U.S. stock markets have inched higher to new all-time records, sometimes on a daily basis. This has resulted in historically low volatility for equities.

Gundlach uses a basin/range analogy to explain an anticipated spike in volatility.

He notes that Mount Whitney, the highest point in the Continental United States, is very close to Death Valley, the lowest point.

This relation is not by coincidence. Nevada miners know it is driven by plate tectonics. We’ve got lots of basins and ranges in our state caused by the massive collision of Pacific and continental plates. Market volatility has been lazing about in Death Valley, Gundlach said, but is ready to soar to Mount Whitney heights — a tectonic shift in markets.

Armageddon?

By the time you read this column, all hell might be breaking loose or the dogs might be fast asleep again on the porch. If we remove geopolitical concerns, there is evidence that economies worldwide are See Baker, 76

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improving. Some economists use the phrase “synchronous recovery” to argue improving demand for raw materials. The 10-year Treasury yield is also an accepted gauge of U.S. economic growth, so expectations for higher rates and improving gross domestic product are consistent. So far, the U.S. Federal Reserve appears to be on the same page as they slowly increase their benchmark rate.

Unless missiles are flying through the air, rising rates in a low-inflation environment are a serious headwind for gold prices. Why place money in gold when you can earn a decent return from interest-bearing assets?

In this scenario, a declining GCR says copper continues to outpace gold. By the model, a 2.7 percent yield results in a 389 pound per ounce GCR; $3 per pound copper implies $1,167 per ounce gold. Ouch.

However, if rising inflation is added to the picture, as Gundlach suggests, gold’s outlook improves. Investors seek real returns or the difference between yield in nominal terms and inflation expectations. If the latter rises in concert with the former, gold regains some shine.

It is also important to note for the 148

RICHARD P. BAKER‌

The gold-to-copper ratio has trended down since mid-April. market days shown in the second graph, gold price below $1,200 has only occurred for 5 days – about 3 percent of the time.

This reinforces the notion that there is strong support at the $1,200 level, and that a return to $1,100 territory is unlikely. Even lacking geopolitical shock, there appears to be enough background fear and uncertainty to keep the yellow metal in the upper levels of the mine.

Gundlach sees value in gold in the longterm and uses it as a hedge against rising volatility and lower equity prices. In a recent Reuters interview, he said, “Gold looks cheap compared to markets that have rallied

St. Louis, Missouri

a lot ... .”

How then do we explain the very low GCRs suggested by the second graph? If falling GCRs and a bump in rates do indeed trigger high volatility, you can throw once-useful models overboard as investors flee the ship. I contend that descending below the 400-pounds-per-ounce level is unlikely for 2017 and that there are good reasons to be bullish for gold prices going forward — some more scary than others. On the high side, $1,400 per ounce is certainly possible for gold given a geopolitical shock.

Given a less threatened and improving global economy, $3-plus per pound copper is in the cards and gold above $1,200 likely.

Richard P. Baker is the author and editor of the Eureka Miner’s Market Report at eurekaminer.blogspot.com. He owns shares of the SPDR Gold Trust ETF (GLD), iShares Silver Trust ETF (SLV), PowerShares DB US Dollar Bullish ETF (UUP) and miners Newmont Mining (NEM), Freeport-McMoRan (FCX) and McEwen Mining (MUX). Please do your own research, he says, because markets can turn on you faster than a feral cat. ‌

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Nevada State Museum restores mint GUY CLIFTON ‌In February of 1870, a sparkling new steam-powered coin press inside the United States Mint in Carson City struck its first coin, a Seated Liberty silver dollar with a crisp CC mint mark.

One hundred and forty-seven years, millions of dollars, a couple of road trips and a healthy dose of serendipity later, Press No. 1 is still pressing metal into medallions in the same building in which it started.

“It’s still in operation, still doing what it was intended to do,” said Myron Freedman, director of the Nevada State Museum, which occupies the former U.S. Mint building. “We are pretty proud to be able to use it for its historically intended purpose.”

After being down for several months for repairs, the press

variation. The medallions that the press will produce will be smaller, 30 millimeters, than the silver dollar-size of past years.

The change is being made at the urging of three parties: the coin press consultant (structural engineers) from the Oakland, California-based company that repaired the 12,000-pound press; a restoration specialist at the Nevada State Railroad Museum; and independent analysts.

They say the striking pressure required to imprint designs onto the blank coins – between 150 NEVADA STATE MUSEUM‌ and 170 tons – is more than the 147-year-old press can handle.

A crane delivers Coin Press No. 1 to the front door of the Switching to smaller medals, Nevada State Museum in Carson City in February 1958 about half dollar sized, can be after returning from the San Francisco Mint. done with less strike pressure (a is expected to be back in oper- medallions for the public’s maximum of 110 tons) and thereation in September, pressing view and purchase – but with a fore, less stress on the machine.

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NEVADA STATE MUSEUM‌

Judge Clark J. Guild, founder of the Nevada State Museum, points to the V&T Railroad brass plate on Coin Press No. 1 when it was returned to the Nevada State Museum in 1958.

Decreasing the tonnage will aid in the preservation of the press.

Finding replacement parts for the machine is difficult to impossible and, in many cases, the parts and tools to remove and replace them, have to be fabricated from scratch. It also creates a dilemma for historians.

“Our No. 1 priority as a museum is to protect the artifact,” Freedman said. “We love being able to produce these medallions and to share that process with the public, but we also must recognize this is an important artifact in Nevada’s history.”

Freedman said historical research has shown the press, which was built in 1869 by Morgan & Orr in Philadelphia, was designed to press at a muchlower tonnage than the 200 tons it operated at in its early years.

In 1878, it suffered a catastrophic failure, a cracked arch, which put it out of commission for a time. Machinists at the local shop of the Virginia & Truckee Railroad repaired it, and proud of their handiwork, replaced the original brass plate bearing the name Morgan & Orr with their own.

Between 1870 and 1893, the Carson City Mint produced nearly $50 million (face value) of gold and silver coins, including gold double eagles ($20) and eagles ($10), half eagles ($5), silver dollars, half dollars, quarters, dimes and 20-cent pieces.

The coin press, really the entire Carson City Mint, came about because of the mining boom in Virginia City. Most of See Museum, 80

80 • MINING QUARTERLY, Elko, Nevada FALL 2017

Museum From 79

the coins that came out of the mint were made from Nevada silver and gold.

Today, coins with the CC Mint mark are highly prized by collectors and among the most valuable in the collecting world.

An 1873 Carson City dime with no arrows – the only one of its kind known to still exist – sold at auction for $1.8 million in 2012.

“Over the last 45 years, the Carson City coins have just skyrocketed in popularity in the numismatic community,” said Rusty Goe, a prominent coin dealer, collector and author of the 2003 book, “The Mint on Carson Street.”

“You can’t have any more special relic than the coin press that made these coins,” Goe said.

The historic dime was

certainly pressed in Coin Press 1, which was the only press at the mint until 1875. Eventually, three coin presses operated there as demand for the coins grew.

The Carson City Mint ceased coin production in 1893 and the presses were removed in 1899.

Press No. 1 was moved to the Philadelphia Mint, where it was remodeled in 1930 to operate with electric power. In 1945, it was transferred to the San Francisco Mint and renumbered “5” to correspond with its place in the coining department there.

In 1955, when all coin production was temporarily halted at the San Francisco Mint, the old press was targeted to be scrapped. If not for Frederick Monteagle, an eagle-eyed Oakland newspaperman who was also an avid Carson City Mint coin collector, the press might have ended up on the scrap heap See Museum, 82

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The 147-year-old Coin Press No. 1 stands ready to operate again in the Nevada State Museum.

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82 • MINING QUARTERLY, Elko, Nevada FALL 2017

Museum From 80

of history.

“He’s the guy in 1958 who sent word to Nevada that they were scrapping the press,” Goe said. “We owe him a big debt of gratitude.”

With Monteagle acting as the middleman, Nevada State Museum founder Clark J. Guild and the museum board of trustees were able to buy the press for the state for $225 and it returned to its original home inside the Nevada State Museum.

For the next six years it was a popular artifact in the museum, but in 1964, U.S. Mint director Eva Adams, herself a native Nevadan, was faced with a severe coin shortage and requested the loan of the press.

It was trucked to the Denver

“Our No. 1 priority as a museum is to protect the artifact. We love being able to produce these medallions and to share that process with the public, but we also must recognize this is an important artifact in Nevada’s history.”

— Myron Freedman, Nevada State Museum director

Mint and operated for the next three years, striking more than 188 million coins during that time.

In 1967, Press No. 1 returned to the Nevada State Museum for good and converted to a slower electric drive. Through the years, it has produced dozens of memorable – and collectible – medallions.

Fro m 1 9 7 5 to 1 9 76, i t

produced a coin commemorating the country’s bicentennial.

“That was a very important beginning,” said Bob Nylen, curator of history at the Nevada State Museum. “Over the years, we’ve done medallions for state agencies and the public and private sector. It’s been quite a lot of projects.”

Projects for the Pony Express, V&T Railroad Reconstruction, Abraham Lincoln Bicentennial, and Nevada’s sesquicentennial and a coin commemorating the Nevada State Museum’s 75th birthday, have all been completed on Press No. 1.

One of the most memorable days for Nylen and longtime volunteer and coiner Ken Hopple, was in 2006, when commemorative coins were minted to coincide with the release of the Nevada state quarter.

A huge crowd assembled at the museum on that cold

January day to acquire one of the newly minted “Spirit of the West” medallions, purchasing them as soon as they left the press.

Being able to see the historic press in action is something unique for visitors to the museum, Freedman said, and something that museum leaders want to continue.

“Thousands of visitors have been delighted to see the press in operation during demonstrations given by volunteer and local favorite Ken Hopple,” Freedman said, “and to purchase medallions in the museum gift shop.”

Guy Clifton is a public relations specialist, Nevada Department of Tourism and Cultural Affairs. ‌

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