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P U BL I S H E D BY T H E E L K O D A I LY F R E E P R E S S

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Rock to Copper Plate

Scott Collins, project controls manager at Newmont Mining Corp.’s Phoenix Mine, describes the new copper processing facility.

Marianne Kobak McKown/Mining Quarterly


— INSIDE — WASTE TO REVENUE —

Phoenix will process copper

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NEWMONT Investing in a recreation area — Payraise producing to 2014 —

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Page 82

No end to ore yet at Pete Bajo —

Page 102

VERIS GOLD Starvation Canyon opens —

Page 45

BARRICK Efficiency, safety at Cortez — Leadership classes at UNR —

Page 32

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GOLDCORP Marigold looks to future — Page 58

BLASTS FROM THE PAST SERIES Silver Veins to clay pots —

Columnists

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Tim Crowley

Page 26

John Dobra

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MINING QUARTERLY Travis Quast . . . . . . . . . . . . . . . . . . . . . . Publisher Marianne Kobak McKown . . . . . . . . . . Editor 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 Street, 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

Battle through adversity In Barrick’s case, trouble in South ELKO — The second quarter of 2013 America at the Pascua-Lama project also seemed to be tough on the mining impacted the international company. industry, but a few companies also On a brighter note, most shined through the adverof the Nevada mines of sity. these two companies are The yellow metal in still profitable. Nevada went through This issue’s cover story another price scare. explores one of the many Six months ago gold was improvements and expanpriced above $1,600, but sions Newmont has plunged more than $200 financed. Even when the in April . company is losing money, Another drop came in it is finding ways to invest June. The price momenin its mines so it can keep tarily dipped to $1,191.70 moving forward. on June 28 but the gold Barrick also has invested market closed that day at in some of its Nevada $1,235.30. mines. In this issue, we Since then, the gold tour the expansions in price seems to be holding Cortez Hills Underground. in the $1,300 range. As I Another highlight of this am writing this (Aug. 22), quarter came from Veris the New York spot gold ARIANNE Gold’s Elko County mine price was at $1,374.20. site. Starvation Canyon The Nevada Legislature OBAK C OWN began producing ore. Veris passed the mining tax bill, Gold also went from losing Senate Joint Resolution 15. This bill repealed a provision in the state money to earning it. In August, the company reported income of $9.4 million. constitution that caps the mining This issue also has several stories on industry’s net proceeds of minerals at 5 the people who work in the mining percent. How this bill may affect the industry as a whole and companies indi- industry. I took a flight with a pilot who works vidually has yet to be seen. Nevada for Newmont and one of our staff writers Mining Association President Tim Crowley shares his views on mining tax- interviewed a couple of Barrick underground rappers. ation in this edition of the Mining We once again take a journey into hisQuarterly. tory in our “Blasts From The Past” series. A few mining companies suffered This time we visit the town of Tuscarora. financial blows this second quarter. You can find details on all these stories Newmont Mining Corp. and Barrick and more in this edition of the Mining Gold Corp. both sustained losses. Quarterly. Newmont reported a $2 billion loss July ——————— 26 and Barrick reported a $8.56 billion loss Aug. 1. Marianne Kobak McKown is editor of The lower gold prices were part of the the Mining Quarterly and mining editor cause, but lower production and higher for the Elko Daily Free Press. She can be costs also had an effect on the finances. reached at mining@elkodaily.com.

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FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 1


From waste to revenue

Marianne Kobak McKown/Mining Quarterly

Construction workers are in the process of completing the new copper processing facility at Newmont MIning Corp.’s Phoenix Mine. The copper leach pad can be seen in the distance.

2 MINING QUARTERLY, Elko, Nevada FALL 2013


Marianne Kobak McKown/Mining Quarterly

Joe Namlick describes one of the tanks for the new copper processing plant at Newmont Mining Corp.’s Phoenix Mine. Construction workers are in the process of putting siding on the building. Namlick is the construction manager for the project, and he is employed by NewFields Mining Design & Technical Services.

Newmont to begin processing copper plates at Phoenix By MARIANNE KOBAK McKOWN Mining Quarterly Editor

BATTLE MOUNTAIN — Newmont Mining Corp. will soon cut out the middle man in copper production. In August, Newmont employees and contractors were putting the finishing touches on the Phoenix Copper Leach Project. The copper processing plant construction is expected to be completed this month and should be producing copper sheets by October, said Scott Collins, Newmont project controls manager at the Phoenix Mine. “When fully ramped up, there will be a staff of about 50 to run the whole plant,” Collins said. Once the plant is completed, the mine will transport the finished product directly to manufacturers from the site. Collins said the plant will process about 2 million pounds of copper a month. The plant may produce 20 million to 25 million pounds of copper a year. It will produce about 200 million to 300 million pounds over the life of mine, which is estimated at about 30 years. The project is 12 miles southwest of Battle Mountain on private and public lands in Lander County. This plant is allowing the Phoenix Mine to turn what was originally classified as See PHOENIX, 5

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 3


4 MINING QUARTERLY, Elko, Nevada FALL 2013


Phoenix ...

Contractors work to finish construction on the acid tanks area of the copper processing facility at Newmont Mining Corp.’s Phoenix Mine. The area is inset to help capture possible leaks.

Continued from page 3 waste into revenue for Newmont, said Newmont Senior External Communications Representative Matt Murray. Construction on the plant began in 2012, but the leach pad was built in 2011. The leach pad is 8 million square feet, said Joe Namlick, NewFields construction manager at Newmont’s Phoenix Mine. “There’s additional plans to expand the leach pad,” he said. As each portion of the project is finished, the system is checked before it’s handed over, Namlick said. “We’ve taken a hybrid approach to the process, Joe has been here at the site for quite a while,” Collins said. “Newmont employees work closely with the contractors.” Despite the plant not being finished, leach was already underway in August, Collins said. The copper leach project is a closedloop process, which means the sulfuric acid solution used to extract the copper

Marianne Kobak McKown Mining Quarterly

See PHOENIX, 6

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Phoenix ... Continued from page 5 from the rock is used over and over again, Collins said. The plant has acid tanks, which are connected to the system to add more sulfuric acid solution when needed, he said. The tanks at the plant will hold 93 percent sulfuric acid in a solution. The sulfuric acid solution is gravity-fed through pipes to the leach pad. It is about 21⁄2 miles from the plant to the leach pad. The facility and the trench holding the pipes are lined to protect the surrounding area from leaks. If a pipe leaks, the acid solution would still reach the leach pad because of the way the channel is constructed — downhill and lined. Once the sulfuric acid reaches the leach pad, it dissolves the copper in the dirt. This dissolved copper and sulfuric acid solution, then moves by piping into the pregnant leach solution or PLS pond. The pond is double lined and has bird balls covering the surface, so animals can’t land in the solution. From the pond, the leach solution, Marianne Kobak McKown/Mining Quarterly

See PHOENIX, 10

This solution helps to separate mineral from rock at the copper processing facility at Newmont Mining Corp.’s Phoenix Mine.

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Marianne Kobak McKown/Mining Quarterly

At left: This pipe sends a sulfuric acid solution to the top of the copper leach pad at Newmont Mining Corp.’s Phoenix Mine. Above:This is one of several pumps used to move the leach solution back to the copper processing facility. Below: Leach solution flows off the leach pad and into the PLS pond. The leach solution will be pumped to the copper processing facility.

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Phoenix ... Continued from page 6 which contains copper values, is sent back to the processing plant by 600-horse power pumps. Once the leach solution reaches the plant, it begins the process to become copper sheets. “We separate the copper from the acid by introducing an organic solution,� Collins said. “Then we introduce the electrolyte solution in the tank farms. The electrolyte solution cleans the solution of the crud, then it’s sent on to the electrowinning process and copper plates are produced.� The electrowinning process makes the copper go from a liquid back to a solid. The electrolyte solution, containing the copper values, is sent into electrowinning cells. Each of these 30 cells contains 60 cathode plates and 61 anode plates, Collins said. The cathode plates are made of stainless steel and the anode plates are made of lead. “The copper won’t stick to (the anode),� Collins See PHOENIX, 12 Marianne Kobak McKown/Mining Quarterly

Joe Namlick describes how the tank farm works in the new copper processing plant at Newmont Mining Corp.’s Phoenix Mine. Namlick is the construction manager for the project, and he is employed by NewFields Mining Design & Technical Services.

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Marianne Kobak McKown/Mining Quarterly

Above: These anode or lead sheets will be used to push copper onto cathode or stainless steel sheets in the electrowinning cells in the new copper processing plant at Newmont Mining Corp.’s Phoenix Mine. At right: Contractors finish construction on the electrowinning building, on the left, and the tank farm structure is in the foreground at the new copper processing facility. Trucks will transport copper plates from the electrowinning building to manufacturers. Part of the mine can be seen in the background.

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Phoenix ... Continued from page 10 said. “The anode is there to push the copper on to the cathode.” Each sheet of copper produced will be about 120 pounds and will be 3 feet by 3 feet. The copper sheets will be transported directly from the mine to manufacturers. While this is the first plant of its kind in Nevada, there are several facilities like Phoenix’s in Arizona, however those are much bigger, Collins said. Safety and environmentally friendly Every part of the project was constructed to make sure the acid and other solutions stay within the process. “Everything is set up for containment,” Namlick said. Every area is lined. The acid tanks are inset to help contain any leaks. The electrowinning cells have covers, so the fumes remain inside the system and workers do not have to wear ventilators while in the plant. “The blue pipes in the building are for the scrubber system,” Namlick said. “It keeps the air cleaner and it gets filtered out.” The buildings also have a fire suppression system that sprays 1,600 to 1,800 gallons of water per minute.

Marianne Kobak McKown/Mining Quarterly

Newmont Mining Corp.’s Project Controls Manager Scott Collins explains how the electrowinning cells work in the Phoenix Mine’s new copper processing facility. The cells are in the background.

12 MINING QUARTERLY, Elko, Nevada FALL 2013


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Leaving something behind

Newmont joins with government agencies to improve a recreation area By MARIANNE KOBAK McKOWN Mining Quarterly Editor

BATTLE MOUNTAIN — Old mines leave behind many things and sometimes those are man-made elements mixed with the beauty of nature. Newmont Mining Corp.’s Phoenix Mine is getting a head start on what it will leave on its property. Newmont partnered with Lander County Convention and Tourism Authority, Lander County, Nevada Department of Wildlife and the Bureau of Land

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Management to enhance the Willow Creek recreation area to encourage fishing and camping. This Willow Creek is separate from the Willow Creek Reservoir that is between Midas and Tuscarora. The drive to Phoenix doesn’t have much traffic, especially when drivers turn off State Route 305. Once drivers follow the signs to Willow Creek, they will have a hard time remembering they are on mine property. The ponds at Willow Creek are man-made, but fed by a natural spring. The recreation area contains three bodies of water that are accessible to the public —

Willow Creek reservoir or upper pond and the middle and lower ponds, said Shar Peterson, Newmont’s senior external relations representative of the Battle Mountain area. A previous mining company, in the 1960s, constructed the ponds, Peterson said. By the time Newmont owned the mining property, the ponds had been neglected and almost forgotten. However, people could still access the ponds on See WILLOW, 16


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Above: A Monarch butterfly fans its wings on a thistle at Willow Creek Recreation Area on the Phoenix Mine property. Opposite page: The middle pond at Willow Creek Recreation Area on the Newmont Mining Corp.’s Phoenix Mine property.

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Willow Creek Road. When Newmont built the new copper leach pad for Phoenix in 2011, the company rerouted the road to Willow Creek around it and dug a diversion channel to prevent any major storm from overflowing the leach pad with water. Yet, the ponds still lacked something. “We talked about what we could do to make this sustainable,” Peterson said. This talk led Newmont to partner with government agencies in 2012. Lander County Convention and Tourism Authority gave $150,000 to the project and Newmont employees completed the in-kind labor. Work on the project began this year. Workers cleaned the ponds and thinned out the vegetation around them. See WILLOW, 19


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Willow ... Continued from page 16 โ€œNo one knew the lower pond was there until we cleaned it up of vegetation,โ€ Peterson said. Employees completed phase one of the project this year. They dredged ponds and installed picnic tables, trash receptacles and restrooms. Workers also built a pedestrian bridge over part of the stream that connects the middle and lower ponds. โ€œThe best part of having NDOW help was to determine the best way to handle and maintain the ponds,โ€ Peterson said. Part of phase one also included making parking areas for camp trailers or recreational vehicles. โ€œPeople have been camping all over the area,โ€ said Ethan Arky, outdoor recreation planner for the BLM. โ€œSo we put in some features to direct camping to certain areas, donโ€™t know what will work yet, so we can still move some things around.โ€ While at the recreation area in August, Arky and Peterson were already talking about changes to the parking area so it

Ethan Arky of the Bureau of Land Management, left, and Shar Peterson, from Newmont Mining Corp., discuss the drop in the waterline at the upper pond at Willow Creek Recreation Area on the Phoenix Mine property. Marianne Kobak McKown/Mining Quarterly

See WILLOW, 23

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A close-up of the dragonfly. Marianne Kobak McKown/Mining Quarterly

Above: A dragonfly makes its way across the water of the middle pond at Willow Creek Recreation Area on the Phoenix Mine property. At left: Water from a spring fed stream makes its way into the lower pond, which is used as a swimming hole. Below: A small flock of common moorhen, also known as mud hen or coot, paddle through the water in the middle pond.

20 MINING QUARTERLY, Elko, Nevada FALL 2013


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Willow ... Continued from page 19 looked more like parking spaces rather than a field of boulders. The area between the middle pond and the lower pond has a few spaces with shade, but most of the trees are around the water. The majority of areas large enough for camp trailers or recreational vehicles do not have shade. “Ideally we want to have shade but most people up here would have generators and AC,” Arky said. “Camp trailers or recreational vehicles need level areas to set up camp. We may get more vegetation and shade eventually.” People also can fish in the ponds, which were stocked with German Brown and Rainbow trout. However, the lower pond is used more as a swimming hole, Peterson said. Unlike some public camping grounds, reservations are not necessary at Willow Creek. “To use the area it is first come, first served,” Peterson said. “Not all use has been by locals; we’ve had people from Winnemucca and some campers from out of state.” Rich Ripley, chairman of Lander County Convention and Tourism Authority, said he loves what has been done at Willow Creek. See WILLOW, 24 Marianne Kobak McKown/Mining Quarterly

Lander County Convention and Tourism Authority Chairman Rich Ripley, watches as his 15-month-old son, Jackson, dips his shoe in a stream at the Willow Creek Recreation Area.

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 23


Marianne Kobak McKown/Mining Quarterly

Above: A fisherman tries to catch something in the upper pond at Willow Creek Recreation Area on the Phoenix Mine property. Above left: A butterfly lands on flowers near the upper pond. Below left: An area with boulders is set up for camp trailers and recreational vehicles near the middle pond.

Willow ... Continued from page 23 “We’ve been trying to do this for three or four years now,” he said. “I love the progress. I love we all finally got together. I think it’s a huge asset for Lander County.” Ripley said the authority just voted to give another $150,000 for phase two of the project. The next step for Willow Creek is to clean up the middle pond to make it better for fishing. Peterson said the weeds in the water need to be thinned out. How to reach Willow Creek Head south on State Route 305 out of Battle Mountain, travel approximately 12 miles and turn right on the Copper Canyon/Buffalo Valley road. Once you are headed west, travel about five miles to the Buffalo Valley Road/Phoenix Mine junction; continue on the Buffalo Valley road to the next right turn off which is marked with Willow Creek signage; continue north until you arrive at the Willow Creek Recreation area. The Willow Creek Recreation area is about nine and a half miles from the Buffalo Valley Road/Phoenix Mine junction.

24 MINING QUARTERLY, Elko, Nevada FALL 2013


Marianne Kobak McKown/Mining Quarterly

Above: A couple of birds walk across the wet ground on the upper pond. At right: Rich Ripley, holding his son, Jackson, far left, Ethan Arky and Shar Peterson look at a footbridge crossing a stream at Willow Creek Recreation Area on the Phoenix Mine property.

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To understand mining’s business operations is to understand good mining policy By TIM CROWLEY President of the Nevada Mining Association

Reflecting on the recently adjourned 2013 Nevada Legislature, there were several proposed policies targeting the state’s mining industry that came from a lack of understanding of our business model. For instance, this past session saw the introduction of a proposal to increase industry-specific taxes on mining by $600 million. This was an extreme measure that did not gain any progress, but a perfect example of why the Nevada Mining Association must constantly educate and explain the ramifications of poor policy on the business side of the industry. In the case of this extreme tax proposal, there’s no way to enact that type of taxation without ultimately destroying the mining industry, and I’ll explain by breaking down the basic economics of a mining operation. As with any business, mining exists because there’s a demand in society for the minerals we process. In fulfilling this demand, Nevada mines provide some of the state’s best jobs (paying twice the state average salary), invest significant capital into the state (more than $1.5 billion per year in capital investment) and grow

Nevada’s economy by working with more than 2,300 Nevada businesses that provide goods and services to mining companies. The industry also pays significant taxes totaling more than $400 million in state and local contributions, which is four times the average on a per employee basis. As with any business, those that incur increased overhead, such as taxes and escalating operating costs, or decreased value of their products, such as the recent precipitous drop in gold value, must absorb these costs elsewhere in the business. For many gold mining operations, the total cost of extracting a sellable ounce of gold from the ground can average around $1,000 per ounce, and poorly planned tax policies would have neg-

ative effects in a volatile, downward-trending commodities market. Using the proposed $600 million mining tax increase as an example, the additional costs for the business would have to be covered by cutting jobs and/or salaries or capital investment. To balance the budget in theory, our average annual employee wages could be cut in half from their state-leading $88,000 to the state average of $45,000. However, our highly-skilled employees would simply leave and find jobs in Australia, Canada, Peru, South Africa or South America where miners are paid on average $90,000 per year. Without qualified employees, mining in Nevada would cease. When considering a decrease in capital investments, the scenario becomes even more complicated. In 2011, mining spent $1.6 billion looking for new resources and building new mine facilities. If mines were to decrease that number by even $600 million, they wouldn’t find adequate resources to refresh their reserves and the industry would ultimately die. Mining in today’s lowgrade (less gold in the rock) ore bodies becomes more See CROWLEY, 31

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Nevada Mining Association announces 2013 Safety Awards By MARIANNE KOBAK McKOWN Mining Quarterly Editor

ELKO – The Nevada Mining Association announced 19 mine operators and 38 individuals will be presented Safety Awards Saturday. The 2013 honorees are a select group whose efforts emulate the industry-wide motto to send every mining employee home safe and healthy after every shift, said Nevada Mining Association President Tim Crowley. The awards will be presented during NVMA’s annual convention in Lake Tahoe. “The mining industry’s complete devotion to safety is something I’m proud to discuss with individuals statewide on a daily basis,” Crowley said. “From implementing the latest safety technologies to monitoring the everyday health of employees as they work their shifts, mining operators throughout Nevada have fully committed themselves to making safety their highest priority, and the NVMA would like to thank these devoted organizations and individuals through our 2013 Safety Awards.” The NVMA Safety Awards are given annually to both mine operators and individual mining employees in several categories, and data for the 2013 awards is based on performance in the 2012 calendar year. Newmont Mining Corp. and Barrick Gold Corp. both won several awards for their mine properties and their employees. Newmont won six Mine Operators Safety Awards and Barrick won five out of 13 awards given in the

surface and underground categories. “These awards both individually and at site operations are the result of everyone’s commitment to zero harm in the workplace,” said Randy Squires, Newmont’s senior manager of HSLP compliance. “These individuals and many others have shown the vital behaviors that are critical to their safety and their co-workers. Due to their actions and Newmont’s focus on our Safety Journey these sites are being recognized for their outstanding safety performance.” “It’s great to see continued success at Turquoise Ridge, a mine that has its own set of challenges with well-known poor ground conditions,” Barrick Gold of North America’s Director of Operations Andy Bolland said. “The miners at TR have learned how to operate safely over many years and it is very gratifying to watch them build a tradition of excellence at this historic Nevada mine. “Nigel Bain’s selection as General Manager of the Year and Colt Nelson’s award as Safety Manager are further

“From implementing the latest safety technologies to monitoring the everyday health of employees as they work their shifts, mining operators throughout Nevada have fully committed themselves to making safety their highest priority, and the NVMA would like to thank these devoted organizations and individuals through our 2013 Safety Awards.” — Tim Crowley Nevada Mining Association President evidence of the culture of safety leadership at Turquoise Ridge.” “The Cortez underground has won many safety awards over the years, including two national Sentinels of Safety awards,” said Bolland. “While still a relatively young operation, they prove what we preach — take care of the people, planet and the property and production will take care of itself. “Tom Bassier’s selection for lifetime achievement is most appropriate. Tom recently retired from a very successful career as a safety leader at Goldstrike, where he See AWARDS, 30

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Awards ... Continued from page 28 served for more than 25 years. Tom was a big part of the positive safety culture we’ve built at Barrick.” Coeur Mining Inc.’s President and CEO Mitchell J. Krebs said he was proud of the staff at the Rochester Mine for its first place award. “We are honored that the NVMA has again recognized Coeur for its dedication to worker safety,” Krebs said. “Nothing is more important to us than the well-being of our workforce and we are committed to maintaining the highest health and safety standards at all of our operations.” Operator awards are given to the top three mines in designated categories based on their safety rate, which is calculated by a formula factoring the number of employees on site, number of man hours for that year and penalties for lost-time accidents, number of reportable incidents and lost-time days. Individual awards are selected based on nominations only, and those nominations are judged on both the personal safety record of the individual and that person’s involvement in advocating safety in the workplace.

Mine Operators Safety Awards Surface Operations Large – 300+ employees First: Newmont Mining Corporation – Twin Creeks

Operator awards are given to the top three mines in designated categories based on their safety rate, which is calculated by a formula factoring the number of employees on site, number of man hours for that year and penalties for lost-time accidents, number of reportable incidents and losttime days. Barrick, Newmont and Coeur operations each won at least one first place award. & Sage Mill Second: Newmont Mining Corporation – South Area Third: Barrick Gold of North America – Goldstrike Medium – 100-299 employees First: Coeur D’Alene – Rochester Mine Second: Barrick Gold of North America – Goldstrike Mine, Autoclave/Mill Third: Newmont Mining Corporation – Genesis Small – 20-99 employees First: Newmont Mining Corporation – Lone Tree Underground Operations Large – 300+ employees First: Barrick Gold of North America – Turquoise Ridge Second: Newmont Mining Corporation – Leeville

Third: Barrick Gold of North America – Goldstrike, Meikle/Rodeo Medium – 100-299 employees First: Barrick Gold of North America – Cortez Second: Newmont Mining Corporation – Midas Small – 20-99 employees First: Scorpio Gold – Mineral Ridge Non-Metal Mining Category First: EP Minerals – Colado Second: Granite Construction – Nevada Operations Third: EP Minerals Clark Mill & Mine Contractors Category First: Ames Construction – Nevada Operations Second: Brahma Group Inc. – Nevada Operations

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Individual Safety Awards General Manager Nigel Bain – Barrick Gold North America Safety Manager Colt Nelson, Barrick Gold North America Safety Professional Doug Longchamps, Goldcorp Inc. Terry Sandy, Barrick Turquoise Ridge Kenny Groves, Barrick Cortez Jennica Fitzgerald – Newmont Mining Corporation Mine Manager/Superintendent Joseph Lounsbery, Newmont Mining Corporation Chuck Pollard, Barrick Goldstrike Mines Inc. Chris Swanson, Round Mountain Gold Corporation Jon Laird, Barrick Turquoise Ridge Byron Hammond, Newmont Mining Corporation General Supervisor/Middle Management Mark Wonenberg, Barrick Goldstrike Mines Inc. Al Smith, Allied Nevada Gold Corporation Pat Donovan, Newmont Mining Corporation Trainer Tom King, Barrick Turquoise Ridge Jesse Hill, Newmont Mining Corporation Matt Rucker, Barrick Cortez

Supervisor Perseo Anaya, Goldcorp Inc. Tom Thornton, Goldcorp Inc. Cody Horton, Newmont Mining Corporation Greg Jones, Newmont Mining Corporation Mark Jenkins, Newmont Mining Corporation Non-Supervisory Trainer Scott Cross, Goldcorp Inc. Dave Rascon, Round Mountain Gold Corporation David Ricker, Newmont Mining Corporation Non-Supervisory Emergency Response Greg Teixeira, Round Mountain Gold Corporation Ron Snellings, Newmont Mining Corporation Jack Simonsen, Barrick Goldstrike Mines Inc. Glen Mangold, Barrick Cortez Non-Supervisory Randy Fentress, Newmont Mining Corporation Scott Munger, Round Mountain Gold Corporation Francisco Diaz, Goldcorp Inc. Joy Lassiter, Barrick Goldstrike Mines Inc. Heather Hickman, Florida Canyon Ramon Marin, Barrick Cortez

Special Awards Tom Bassier, Outstanding Career in Safety Chet Bate, Outstanding Career in Safety

Crowley ... Continued from page 26 complicated with each passing year. With every ounce currently mined another ounce is found because we have the business model in place to do so. Hitting the industry with erroneous taxation limits the ability to reinvest in our operations and replace our reserves. With limited supply, there’s less interest in additional outside investment in Nevada mines; there’s less need to employ Nevadans; and there’s less demand for goods and services provided to the industry. The entire supply chain is negatively affected in a situation comparable to a Nevada casino that can’t reinvest in its accommodations; eventually, that casino’s investors — the patrons who visit on a daily basis — will go elsewhere and the business will falter. Our industry involves intense capital investment, and we are no longer the biggest kid on the block. Nevada’s economy has diversified from its founding days, and while mining has moved from the largest economic sector to its current place as the ninth-largest economic sector, the state has made great strides growing into industries that are now larger than mining, such as real estate, health care, gaming, construction and financial services. To that end, it’s important to understand that mining isn’t just providing great jobs, investing billions in the state, and growing the economy, but we’re also managing our businesses responsibly because current policies allow us to survive through downturns in metals prices and increasing costs.

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Efficiency, Safety Cortez Hills Underground works on expansion By MARIANNE KOBAK McKOWN Mining Quarterly Editor

Cortez Hills Underground Operations Supervisor Cole Gines, left, talks with Kevin Tuttle, underground fixed maintenance supervisor, while riding a transport truck to a new ventilation rise at CHUG. Ross Andreson/Mining Quarterly

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CRESCENT VALLEY — Cortez Hills Underground is expanding and its improvements are making the mine safer and more efficient. “We started development in 2007 and started producing in 2009,” said Cortez Hills Underground Chief Engineer Trent Weatherwax. A small portion of the underground will be mined until 2015 and then the surface miners will come in and finish the area, Weatherwax said. However, the life of the underground mine will go well past 2015. Underground mining will transition into other zones — middle and lower — and should extend the mine life until 2029, Weatherwax said. “There are 5 million tons each for the middle and lower zones,” he said. Barrick Gold Corp. owns and operates Cortez Hills, which is in Lander County. The expansion will keep the 300 employees and 50 contractors working. “There are more than 330 miles of drill holes,” Weatherwax said. “The ore grade ranges between 0.58 to 0.30.” The deepest mining in Cortez Hills goes to about 3,880 in elevation, which is about 2,000 feet from the surface. “We have fully mechanized mining,” Weatherwax said. “The ore

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Cortez Hills employees stand in front of the bottom of the North Raise, a new ventilation shaft for the underground. From left are Casey Dickson, Wayne Godfrey, Lee Reid, Kevin Tuttle and Cole Gines. body is mined in 15-foot levels or cuts, from top to bottom. The initial levels are mined under rock, and the successive levels are mined under backfill.” Underground Improvements While the mine is expanding, Barrick completed improvements on the underground structures. A new laydown area was finished last month, said

Cortez Hills Underground Fixed Maintenance Supervisor Kevin Tuttle. “Instead of keeping supplies on the surface, we’re moving them down close,” he said. “It’s our main laydown area. We have other ones scattered throughout the mine. It was done to be more efficient, but we’re still stocking it.” The unique feature of the main laydown area is that it

was designed as a drive-thru. The area stores pipes and other items, but since it is 35 feet wide it is large enough to store large items and still leave room for vehicles to pull through. Most laydown areas have storage space, but vehicles have to pull in and then back out. “It’s more efficient and it’s a lot safer,” Weatherwax See CORTEZ, 34

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 33


Cortez ... Continued from page 33 said. “One of the biggest risks of operating equipment is backing up.” The laydown area isn’t the only new structure. New areas for new emulsion totes and explosive equipment were built. Barrick bought new totes to hold emulsion, which is used for explosions underground. “We used to bring 15 loads down from the surface,” said Cole Gines, underground operations supervisor. “It would take a lot of time. The larger totes will be more efficient for us and the powder guys themselves.” The new totes are bigger and more efficient, Tuttle said. “The new totes will be able to off-load using hydraulics, instead of an air pump,” he said. “It went from 30 or 45 minutes to eight minutes to load on a powder truck.” The larger totes also decrease the number of trips from the surface to the underground. Instead of 10 to 15 trips, only one to three trips are needed to move the same amount of emulsion. Gines said the area for the explosive equipment also has a safety feature that monitors ground movement. “We shoot two times a day — end of day shift and end of night shift,” he said. The mine has areas to keep caps, boosters and stick Ross Andreson/Mining Quarterly powder, and store two powder trucks. The caps ignite From left, Barrick employees Fidel Vasquez, Cole Gines, Kevin Tuttle and Joe Martinez stand next to a crew transport truck in the the stick powder and emulsion uses a booster and a cap underground laydown facility recently completed. This area was built to be large enough to load equipment and then drive through.

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to set off explosions, Gines said. “We have to keep an inventory of every cap, booster and stick powder and keep it all locked up,” he said. “The caps are stored separate from boosters and stick powder.” “It hasn’t been quite a year since we started the project,” Gines said. “It’s all part of the plan for expansion.” The growth underground also included some drilling from the surface. The North Raise, also known as the North Blind Bore, was completed but isn’t running yet. It is part of a ventilation project. Gines said the ventilation improvements were finished last. The South Blind Bore hasn’t been completed yet. The North Blind Bore was the first one done in Nevada and drilled 1,473 feet from the surface down to the underground. The south ventilation shaft will reach 1,800 feet down from the surface, Mike Owsley, Cortez project site manager, told the Mining Quarterly in May. The North Shaft was started in December 2011 and completed March 31 of this year. It will bring air into the mine. “Right now we bring in air through one portal and out the other portal,” Tuttle said. “The North Raise has one month to be ready to turn on. We may wait until the South Raise is ready. It will lower energy costs with the expansion.” The bottom of the North Raise will expand from

Ross Andreson/Mining Quarterly

Barrick’s Cortez Hills Underground Training Coordinator Joe Martinez talks about the underground blast facility recently completed. The yellow areas in the background will hold the new emulsion totes.

See CORTEZ, 37

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Ross Andreson/Mining Quarterly

Above: Cortez Hills Underground Operations Supervisor Cole Gines talks about the mine’s old emulsion totes, which are on the left. Below: Cortez Hills Underground Fixed Maintenance Supervisor Kevin Tuttle talks about the new emulsion totes at Barrick’s CHUG.


Ross Andreson/Mining Quarterly

Cortez Hills Underground Chief Engineer Trent Weatherwax talks about the expansion plans for the mine.

Cortez ... Continued from page 35 12 feet to 18 feet when the final pieces are installed, he said. Those additions will help move the air into the mine efficiently, said Joe Martinez, underground training coordinator. “Picture a showerhead: you have a half-inch pipe and the showerhead expands the area the water comes out,” he said. The final piece will do the same for the airflow. Intern Program While Cortez Hills is improving its mine, it continues to educate its future workforce. Like all Barrick sites, Cortez Hills participates in the summer internship program. College students work at the mine for 10 to 12 weeks. Ryan Heckman is earning his degree in geological engineering from Missouri University of Science and Technology. While at Cortez Hills, his focus is on exploration. He said he interned at Barrick last year as well. He found out about Barrick when he attended a career fair at school Evan Fillbower from the University of Nevada, Reno, said Barrick actively recruits at the school. Fillbower is studying short-range operation. “I look at the way everything interacts together,” he said. Weatherwax said the interns are part of the staff and treated like everyone else on the crew. “When I was in school I would have been happy to paint a wall, but now the kids are doing a lot of the technical work,” he said. “To me (the internship program) is the biggest way for kids to explore the industry and for us to introduce ourselves,” Weatherwax said. “There’s a generation gap. The last time we had a downturn, there was a loss of talent. I was the only mining engineer in my class in 2003. Developing talent is important. We see it all the way through the workforce.” Fidel Vasquez, Cortez training coordinator, agreed. “We’ve got old and we got young, but nobody in-between,” he said.

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FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 37


Continuing the Family Legacy Engineering firm gets new ownership, business strategy By HEATHER KENNISON Mining Quarterly Staff Writer

ELKO — When George Lostra died in May, his son, Michael, decided to carry on the family legacy — with one change. Michael Lostra, owner and president of Lostra Engineering, has continued with business as usual, but with a different strategy. “My dad never believed in advertising,” Lostra said. “It was all word-of-mouth.” But with increased competition in recent years, the younger Lostra decided that needed to change. In July, Lostra Engineering launched a website and joined the Elko Area Chamber of Commerce. “The dynamics of Elko are changing,” Lostra said. “When you have more and more contractors from out of town, the best thing you can do is advertise.” Lostra is also out to make a name for himself, since he owns and operates Lostra Engineering as the only employee. The business is still run out of his home office at 930 College Ave., and offers all the same services it did under George Lostra. These include civil and structural design and residential, commercial, industrial and mining projects. “It’s a small business, but there’s a big demand for small projects,” said Ferron Konakis, principle engineer for NewFields Mining Design and Technical Services. Konakis has done a variety of projects with both Michael and George Lostra. Some, such as a power substation at Cortez Hills for Barrick Gold Corp., are ongoing. With NewFields handling the civil design and Lostra Engineering the structural, it’s been a collaborative relationship.

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Michael Lostra looks at some plans for the Rabbit Brush Run apartments. “We integrate with each other,” Konakis said. Overcoming adversity George Lostra founded the company in 1991. In October 2011, he was diagnosed with cancer and left the office in the charge of his son. “I’ve been in the office by myself for two years,” Lostra said. Before that, he worked at the company starting in 2000, during college, and began working full-time in 2004. Lostra has a Bachelor of Science in civil engineering from the University of Nevada, Reno. When his father died, Lostra didn’t stop business. “After people pass, you never know how the public will respond to that,” he said. On July 19, he hosted an open house. “You don’t really have time to say ‘My father has passed,’ you have to get right back in it so there’s no lull in business,” Lostra said. Running things without his father has been his biggest hurdle, which others with See LOSTRA, 40

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 39


Submitted

Heather Kennison/Mining Quarterly

Michael Lostra, president and owner of Lostra Engineering, stands in front of his business.

Above: A retainment wall is built at the Rabbit Brush Run apartment complex in 2011. The project was built to accommodate Barrick mining employees. At right: This bridge over Thorp Creek was engineered by Lostra Engineering in 2003.

Lostra ... Continued from page 39 family businesses can relate to. “Not only is he your dad, but he’s your business partner and mentor,” Lostra said. Still, the jobs are picking up. Business has increased by 20 to 30 percent in the past 18 months, Lostra said. In an average year, the company does 150-200 jobs. One of the company’s recent projects is the Rabbit Brush Run Apartments, which started construction in 2011 and was scheduled to be complete by the end of August. The apartments are owned by KLO Global and financed through a loan from Barrick. Ormaza Construction has been working with Lostra Engineering on the project since the beginning. “The complete design of the buildings came from Lostra Engineering,” said Brandon Palmer of Ormaza Construction, who is the project manager. The apartments include 192 units in 16 buildings. “Currently I think most of our tenants are in mining,” Palmer said. The financing through Barrick was beneficial to both sides, as the mine saw a need for more housing for its employees. “Elko is a hard town to build in, though we’re seeing an influx lately in construction,” Palmer said. Ormaza Construction has also been working with Lostra Engineering on a core sawing and logging facility for Turquoise Ridge Joint Venture, which was scheduled for completion in August. The facility is designed for processing drill cores, which are taken into the shop and cut up, Lostra said.

40 MINING QUARTERLY, Elko, Nevada FALL 2013

Submitted

From left are Pedro Ormaza and Brandon Palmer of Ormaza Construction, and Lostra Engineering owner Michael Lostra work on the Rabbit Brush Run apartments. Family legacy Because George Lostra knew people in the area, Lostra wants to keep that connection to his father’s business. Thus, the business carries the theme of “The Legacy Continues ...” One belief Lostra has kept true, since his father died, is the belief in the individual. “We can do mine work and residential, so we’re diverse,” Lostra said. “... Dad would always say ‘Don’t forget the individual.’” For this reason, Lostra believes the smaller individual

projects are equally important as the big commercial ones. He does not expect to expand his business until he sees what the market will do, since expanding could make Lostra Engineering less competitive on the individual level. This would cause him to lose the focus of his business, Lostra said. “I think what Mike is doing is taking it to a new level,” Palmer said. “He thinks about the customer and the livability.” In carrying on George Lostra’s legacy, the engineering company has started a George M. Lostra Memorial Fund. The fund is for college students in the engineering and science field. According to the company website, George Lostra believed in higher education, but said: “There are plenty of scholarships for students just starting college, but what about the students that have proven they are going to continue and finish their degree?” Therefore, applicants must meet the minimum requirements of 60 college credits earned, a declared major in science or engineering and a minimum cumulative grade-point average of 2.5. The annual scholarship is $1,000 for one recipient. Students can begin applying for the scholarship starting Jan. 1. The deadline is April 1, with the scholarship being awarded May 15 and sent out in August. “We’re going to try to keep it going indefinitely,” Lostra said. Applications will become available on Lostra Engineering’s website in January. For information, visit www.ElkoEngineers.com or call 777-1210.


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National: Built by Drillers By DYLAN WOOLF HARRIS Mining Quarterly Staff Writer

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ELKO — National Exploration, Wells & Pumps likes to say it’s a drilling company built by drillers. “Everyone in management has been on the back of a drill rig,” said company president and CEO Jeff Morgan. And Morgan is no exception. He’s a veteran driller with more than 30 years of experience. He was employed as a driller with a company that he eventually purchased after working his way up through the ranks. In 2007, Morgan decided to retire and he sold the company. That only lasted three years.


“I was retired and got bored to death,” he said. Nothing for Morgan could fill the idle void like drilling, and in October 2010 he started National, opening branches in Elko and Phoenix. In the drilling industry, there are some giants, among which National is not. The company has grown, though, with branches in Albuquerque, N.M.; West Jordan, Utah; Denver and three California branches in Montclair, Richmond and Woodland. Morgan said National’s goal is to establish itself as a full service drilling company in the West that can compete with larger drilling companies while maintaining the principals of a company its size. “A smaller company is more responsive to the customer and tighter run,” he said. National prides itself on its employees and the work they do. “It’s all about the people,” Morgan said, “the people we work for, and the people we work with. … One of the great things about our industry: People work hard to earn their money, and I mean they earn their money. We’ve got a lot of damn good people.” The company’s website lists offered services including exploration, geotechnical, soil sampling, well abandonment, depth discreet water sampling, well installation, well development for rehab or testing, conductor casing installation and in-situ chemical injection. Under each service, national has bullet Morgan point lists of possible methods. “We try to be a good, small company “It’s all about the people, the but large enough to have the bench strength,” he said, by offering great work people we work for, and the done by experienced drillers on efficient people we work with.” equipment, safely. — Jeff Morgan Morgan couldn’t stress safety enough. National President and CEO “(Safety)’s not just a program for us. It is truly an integral part of who we are as a company,” Morgan said. One of the first employees National hired was a safety manager. “We’re not an ordinary company when it comes to safety,” Morgan said. “Safety is one of the cornerstones of our company.” Morgan said he participates in a weekly conference call with more than 30 managers to discuss safety issues. So far, the company has had a stellar safety record, he added. The challenges of a drilling company mirror the ebbs and flow of the mines. “Right now, the mining industry has slowed down. Drilling operations and demand has decreased,” he said. “… But we’re restructuring a bit to fit the market.” Elko operations consist mainly of dewatering at gold mines, Morgan said. Morgan loves the industry, he said, and he speaks about it with a noticeable passion. “It’s a unique industry,” he continued. “I don’t have a college education. But the drilling industry has given some of us an incredible opportunity to achieve our dreams. It allows you to learn and grow where you may not have that opportunity in other industries. “We love what we do. It’s really important that we don’t lose that.” Morgan compared drilling to the cowboy West, being outdoors with unique equipment and a connection to the work that stays with you after you’ve punched out for the day. “There’s a sense of independence and freedom that comes with it. … We always say, it’s something that gets in your blood.” For information, visit www.nationalewp.com.

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Website connects employers with applicants in mining industry By JOHN RASCHE Mining Quarterly Staff Writer

tion into better-paying jobs,” he said. Job seekers can use the website for free and there is no fee to apply to job postELKO — Looking to break into the ings. mining industry? Or are you already a Employers can search for applicants miner and interested in climbing the corthrough a resume database, but “a lot of porate ladder? these (applicants) are already employed The website MineIndustryJobs.com and sometimes they work for XYZ and could help you find the next step. they don’t want XYZ to see them MineIndustryJobs.com is a field-spe(applying for other jobs) — so resumes cific career website that helps employers don’t have to be public,” Swanson said. find the people they need to run mining MineIndustryJobs.com helps connect operations. applicants to companies, but it doesn’t “From mine maintenance technicians do all the work for you, he said. to director of mine operations and all jobs “We’re not headhunters,” Swanson in-between, MineIndustryJobs.com is said. “It’s up to you to decide whether mining industry,” Swanson said. here to connect you with the most qualified appliyou meet the qualifications or not.” Employers looking for a specific qualified employee cants, quickly and cost effectively,” according to the MineIndustryJobs.com works through the can receive job postings at different rates. The webwebsite’s promotional material. Workin.com network, which includes more than 40 site also offers discounts when multiple jobs are The website was established three years ago in locally-focused job sites from across the country. posted. Sparks, MineIndustryJobs.com President Eric “MineIndustryJobs.com is industry-specific, but if Benefits of promoting job positions through the Swanson told the Free Press, while attending the applicants need more exposure, we can give them MineIndustryJobs.com include time efficiency, annual Elko Mine Expo. more exposure through those other sites,” Swanson catching the attention of a broader audience and the “The (mining) jobs were out there, but companies said. ability to keep certain information confidential, weren’t going after the right candidates,” Swanson For information, visit the website or contact tech according to the website. said. support at 888-259-2095. Hundreds of mining companies and thousands of MineIndustryJobs.com allows job seekers to post their resumes and to specify fields of interest, such as job seekers are using MineIndustryJobs.com, Swanson said. engineering, geology and marketing. “We’re finding a lot of people that want to transi“The site is like Monster.com, but strictly for the

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Small Mine Development miners gather in front of the Veris Gold Corp.’s Starvation Canyon portal during the recent ribbon cutting of the project. SMD is operating the Veris Gold mine. Ross Andreson Mining Quarterly

Veris Gold opens newest mine in Elko County Starvation Canyon is 19th mine in history of Jerritt Canyon property By MARIANNE KOBAK McKOWN Mining Quarterly Editor

ELKO — After almost 10 years of planning and development, Elko County has a new mine — Veris Gold’s Starvation Canyon. On July 29, Veris Gold hosted a commissioning ceremony at Starvation Canyon, which is part of the Jerritt Canyon property.

Veris Gold President and CEO R. Llee Chapman began the festivities with a welcome to the employees and visitors to the site. “We are building one of the greatest training teams in the world,” Chapman said. “We’re going to build the Jerritt Canyon operation back to where it should be.” In March 2004, Ted Wilton, a geologist from Jerritt Canyon, started drilling and his fifth hole hit the deposit that became Starvation Canyon, Chapman said. Veris

Gold estimates Starvation Canyon has about 1 million tons of 0.15 to 0.2 grade ore. “We’re here to celebrate jobs in Nevada and Elko,” Chapman said. “We spent $14 million on this small mine, and it’s on time and on budget.” Starvation Canyon is on the southern end of the 120See STARVATION, 24

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 45


Ross Andreson/Mining Quarterly

President and CEO of Veris Gold R. Llee Chapman shows off an award to celebrate 8 million ounces of gold produced at the Jerritt Canyon operation during the opening ceremony of the company’s newest mine Starvation Canyon.

Starvation ... Continued from page 45 square-mile property. Initial underground development work, portal excavation and drift development, started in November and continued to early April. Production in Starvation Canyon began in May and so far it has produced about 50,000 ounces, Chapman said. The new mine employs 60 people with Small Mine Development and five or six managers. Starvation Canyon’s mine life is about six years, Chapman said. SMD operates Starvation Canyon. Jerritt Canyon Jerritt Canyon has been mined for 30 years, Chapman said. During that time the site has had 19 mines — 13 open pits and six underground, which includes the three operating mines — Smith, SSX-Steer and Starvation. The operations employs 400 at Jerritt Canyon and 550 for the entire site. Jerritt Canyon opened in 1981, and produced its 8 millionth ounce this year. “Eight million ounces guys, what a run,” Chapman told the crowd while holding a trophy celebrating the accomplishment. Veris Gold spent $210 million improving the Jerritt Canyon facilities. One of the improvements included the company closing the old tailings dam. The plan for the property is to produce, in 2013, about 150,000 ounces of gold at an average cost of $850 an ounce. To achieve this the plant will run 4,000 to 4,500 tons a day, Chapman said. Some of the ore that will help fill Jerritt Canyon’s mill will come from Newmont Mining Corp. mines. Veris Gold and Newmont signed a toll milling agreement in July and Newmont will deliver up to 45,000 tons a month. The toll milling agreement is structured so that all doré produced from the ore will remain the property of Newmont throughout the process and the associated toll milling fee charged to each ton will be treated as a separate revenue stream, offsetting the processing costs. Further terms of the toll milling agreement are confidential to

46 MINING QUARTERLY, Elko, Nevada FALL 2013


both parties. “This contract allows us to fill up the mill,” Chapman said. “We’ll make sure this place runs for the next 30 years.” “There are always challenges,” Chapman said. “We work every day to put ourselves out of work. We constantly have to look for the next ore body. “The gold market is a little unstable, but I’m optimistic. We expect to produce 150,000 ounces this year.” Tailings Facility One of the challenges the property faced was building the new tailings facility for the property. The Nevada Division of Environmental Protection authorized Veris Gold on July 29 to initiate the discharge of tailings into the brand new state-of-the-art facility. The new tailings facility is double-lined and also features recovery of any leakage collected from the synthetic

Ross Andreson/Mining Quarterly

Elko City Councilman Rich Perry, front row left, Elko Mayor Chris Johnson and Elko County commissioners Grant Gerber, second row left, and Glen Guttry, along with employees, current and former, of Jerritt Canyon operations listen as Llee Chapman, president and CEO of Veris Gold talks during the recent ribbon cutSee STARVATION, 49 ting of the Starvation Canyon project.

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 47


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Starvation Continued from page 47 double-liner system, called Drainliner, which is manufactured by Agru America located in Fernley, Nevada. “The environmental protection provided by TSF2 is the result of a major environmental investment by Veris Gold,� said Veris Gold Environmental Manager John Barta. “The new tailings facility, along with the new proven air pollution controls for the roaster stacks, the ore dryer and the refinery altogether significantly improve the environmental performance of the Jerritt Canyon facilities.� Concurrent with the transition to the new tailings facility, TSF2, Veris will initiate closure of the old tailings facility, TSF1, which was constructed more than 30 years ago with pollution controls

Ross Andreson/Mining Quarterly

Elko Mayor Chris Johnson cuts the ribbon commemorating the opening of the Starvation Canyon Mine on Veris Gold property. From left are Joseph Wheeldon, See STARVATION, 52 President and CEO of Veris Gold Llee Chapman, Johnson, Elko County Commissioner Glen Guttry, Assemblyman John Ellison, Graham Dickson and Bill Hofer.

           

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ELKO – Record production has helped Veris Gold Corp. go from losing money to earning it. Veris Gold reported Aug. 15 a net income of $9.4 million for its second quarter, compared with a net loss of $8.3 million for the same period a year ago. Veris Gold owns the Jerritt Canyon Mill Complex, which is 50 miles north of Elko. The income was announced through the company’s unaudited interim results for the quarter that ended June 30. A conference call to discuss the financial and operational highlights is scheduled at 8 a.m. Pacific Daylight Time Tuesday. Details of the call may be found on the Veris Gold website. The second-quarter net income gain arose primarily from income from mine operations of $3.1 million and non-cash derivative gains of $12.2 million, offset with $3.6 million in finance and transactions costs, a significant improvement from the $7.2 million loss from operations which drove the 2012 second-quarter net loss. The company achieved 9 cents basic income per share in the second quarter, compared to a loss per share of 9 cents for the same period the previous year. “We are very pleased to report a successful second quarter to our shareholders,” said Veris Gold President and CEO R. Llee Chapman. “Our lower cash costs per ounce sold, and increased gold sales were a direct result of increased tonnage from our mines and strong performance from the mill operations at Jerritt Canyon.” Revenue from gold sales was $44.9 million for the second quarter, representing a 23 percent increase compared with the $36.4 million earned in the second quarter of 2012, attributable to increased gold production. This year’s second-quarter gold sales were comparable to $45.4 earned in the first quarter despite the gold price per ounce sold decreasing 14 percent. The company earned $1.7 million of toll milling revenue during the second quarter for the processing of 12,915 tons of third party ore. The second-quarter’s cash costs per ounce sold were $1,066, which is an improvement when compared with the second-quarter of 2012 cash costs per ounce sold for $1,642, and the first quarter of this year’s cash costs per ounce sold for $1,509. “We expect to continue to strengthen quarter-after-quarter and we feel confident that by continuing to optimize mill and mining operations we are well on our way to meet our year-end forecast of achieving $850 cash costs per ounce sold and producing 145,000 to 155,000 ounces of gold for the year at Jerritt Canyon,” Chapman said. “Production at our new Starvation Canyon Mine continues to both meet and exceed expected targets. We are also very pleased to see our recent toll milling contracts begin to positively impact our revenue stream and we look forward to increasing this source of cash flow over the next several quarters.” Development on the company’s wholly owned Starvation Canyon Gold Mine was completed in early April and ramped up to its targeted 600 tons per day by June, contributing 47,390 tons of ore containing an estimated 8,630 ounces of gold for the quarter. Jerritt Canyon Underground Mining SSX-Steer Mining Complex At the company operated SSX-Steer mining complex, mine production was 86,512 tons (averaging 950 tons per day) at grades of 0.2 ounce per ton, for an estimated 14,686 ounces for Q2-2013. This represents a 3 percent decrease from the previous quarter’s delivery of 89,225 tons (991 tons per day) but a 15 percent increase in the contained ounces of 12,734 ounces in the first quarter. The reduction in productivity for the quarter was directly related to increased mechanical equipment downtime which the company has taken steps to improve going forward. Smith Mine In the Smith Mine, Small Mine Development LLC delivered 137,978 tons (averaging 1,516 tons per day) to the mill, containing an estimated 18,778 ounces during the second quarter. The tonnage increased from the 114,659 delivered in the first quarter,

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Starvation ... Continued from page 49 consistent with the requirements at the time. The transition to TSF2 addresses concerns voiced by state and federal environmental agencies regarding TSF1. Discharge of tailings slurry to TSF1 will cease by the end of 2013 so that reclamation, supported by the existing bonding held by the company, can commence in the following year. Commissioning Ceremony During the commissioning ceremony, Chapman wasn’t the only one who said he was excited about the new mine. Assemblyman John Ellison, R-Elko, said Starvation Canyon,along with other mines,will help create new jobs. “I’m worried about SJR 15 but I think mining will overcome that hurdle,” he said, referring to the mining tax legislation passed this year by the state. Elko County Commissioner Glen Guttry said he was glad to see all the improvements on the property. “Congratulations to the team,” he said. “If there is anything the county can do let us know.” Elko Mayor Chris Johnson said he helped to install some of the plumbing in the original Jerritt Canyon. “To be standing here some 30 years later is a great feeling,” he said. “I believe Nevada is blessed with a great reserve. It’s great to hear how much gold has been produced.” Rich Perry attended the festivities as an Elko city

Veris ... councilman, but he had a deeper connection to the property. He was Jerritt Canyon’s mill supervisor from 1990 to 1994. “At this place you learned it all,” Perry said. “It’s been a while since I’ve been up here. Llee said some interesting things. ... It’s come a long way.” Perry said Jerritt Canyon benefits from its roaster’s efficiency and recovery. Veris Gold stated in July, a test-batch of at Newmont ore achieved recoveries of 90.3 elkodaily.com percent. “I think there’s plenty more,” Perry said. “This is where the current underground mining boom started. There wasn’t much underground mining skill left in this country when Jerritt Canyon started.” A new employee at the Jerritt Canyon property also shared his perspective on the project. Mine Manager Joseph Wheeldon started with Veris Gold April 22. “I’m the newbie on the block,” he said. However, Wheeldon has been in the mining industry since 1978 and has worked all over the globe, including North America, Africa and South America, but that hasn’t dampened his enthusiasm for the Starvation Canyon mine. “I’m more than excited here,” Wheeldon said. “The potential with this project is immense.”

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Continued from page 50 though the contained ounces decreased from 19,092 mined.The decrease in the grade was a direct result of the increased focus on development at Smith Mine in the months of May and June. Starvation Canyon: Starvation Canyon development was completed in early April, 2013 with the completion of the vent raise. During the quarter, Starvation Canyon production delivered 47,390 tons (averaging 520 tons per day) containing an estimated 8,630 ounces of gold. The 600 ton per day average production target for this mine was achieved in June. Mill/Processing: In the second quarter of 2013 the mill processed 328,606 tons of ore through the Jerritt Canyon roaster, which includes toll milling of 12,915 tons of third-party ore. The second-quarter roaster production was 30 percent higher than the previous quarter when 252,758 tons were processed. The total average tons per day processed during the quarter was 3,611, also representing a 30 percent increase from the 2,800 tons per day averaged in the previous quarter. Recoveries for the quarter averaged 83 percent, a slight increase from the 82 percent demonstrated last quarter, with the month of June averaging a recovery of 86 percent. In the second quarter, 12,915 tons of third-party ore that was toll-milled generated $1.7 million in revenue.


FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 53


Coalition defends, promotes industry By JOHN RASCHE Mining Quarterly Staff Writer

John Rasche/Mining Quarterly

Women’s Mining Coalition Coordinator Lynne Volpi, left, and Consultant Geologist Ruth Carraher, right, stand in front of their organization’s booth at the 2013 Elko Mining Expo in the Elko Convention Center.

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ELKO — For the past 20 years, a large group of women have traveled to Washington, D.C. to show support for a strong mining industry. Three female geologists in Reno formed the grassroots organization Women’s Mining Coalition in 1993 to connect different mining constituents with policy makers in Congress. “People think of lobbyists as cigar-smoking men, but ... they now understand that there are many women in the mining industry,� said WMC Coordinator Lynne Volpi, sitting behind her booth in June at the 2013 Elko Mining Expo. The coalition includes both men and women from different sectors of the mining industry, ranging from metals to coal to trade associations. “We have about 150 individual members and other corporate members,� Volpi said. “We’re not big, but we’re feisty.� Between 35 to 50 WMC members participate in the “Annual Fly-in� to Washington, D.C., according to the organization’s promotional materials. For the 2013 Fly-In, 48 members from 19 states participated in 222 meetings on the Hill spread out more

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“Discussing the importance of domestic mining with our legislators gives a face to the people who are actually in mining. We talk about important issues that affect the mining industry, like permitting and the Endangered Species Act.” — Ruth Carraher Consulting geologist for Women’s Mining Coalition than three and a half days, according to a WMC newsletter. They met directly with 63 percent of the House offices and contacted 65 percent of the Senate offices. The group also visited many other offices, resulting in a grand total of 300 office visits, including regulatory government agencies, such as the Bureau of Land Management, U.S. Forest Service, U.S. Environmental Protection Agency and the Office of Surface Mining, Volpi said. “Discussing the importance of domestic mining with our legislators gives a face to the people who are actually in mining,” said Ruth Carraher, a consulting geologist for WMC. “We talk about important issues that affect the mining industry, like permitting and the Endangered Species Act.” The organization keeps its members informed about mining legislation through its website, www.wmc-usa.org. “Many (opponents) don’t understand mining,” Volpi said. “Mining is an industry that pays well, has benefits, and is important to everyday life, ... (but) it’s easy to say mining is bad and that it should be taxed more. If you’re not there, than you only have people who talk about the doom and gloom. It’s just so easy to bad-mouth any big industry. There’s a huge disconnect between the public and the mining industry. If you want your cell phone, your computer, etc., you need mining. Those materials don’t just appear out of nowhere.” WMC’s continued efforts to educate policy makers about the mining industry led to praise from several legislators, including Sen. Harry Reid (D-Nev.) in 2012. “These women are tremendous representatives of our domestic mining industry, bringing their stories and their enthusiasm about their industry to legislators,” he said. “Members of Congress appreciate WMC’s expertise and their commitment in working tirelessly on important public policy decisions affecting the U.S. mining industry.” Volpi said attending trade shows, such as the Mining Expo, also helps promote the WMC’s mission “to deliver the message to our legislators that a strong mining industry is vitally important to our nation, our communities, our families, and our livelihoods, and that today’s regulations and modern technologies ensure responsible stewardship of our lands.” “There’s a lot of interest in the WMC at these mining expos and we’re building awareness,” Volpi said.

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Defensive Mining Are mines profitable in the long run? By JOHN L. DOBRA, Ph. D.

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We all know about defensive driving. But, there is also defensive mining and I’m not talking about avoiding workplace accidents, environmental damage, public relations problems, etc., although those are all important issues to be defensive about. All over the world, mining is done by a social contract between miners, workers and communities. But it is also done in the face of an inevitable and reoccurring market cycle that creates risk and a need to mine defensively. The conventional wisdom holds that mining, and particularly precious metals mining, is an enormously profitable business, and it is true that some mines are profitable and some are even very profitable. However, what about in general and in the long run? For the most part, mining is a highly competitive and risky industry with market structures characterized by having many sellers of most commodities, many buyers, no significant entry barriers, and miners sell homogenous products. The first two characteristics — many buyers and sellers — imply that buyers and sellers have little pricing power, that is, they are price takers. While entry barriers are greater today than they have been in the past because of regulatory factors like permitting processes, bonding for reclamation, etc., it is still possible “The conventional wisdom holds to open mines in most political jurisdictions. And finally, product homothat mining, and particularly pregeneity means that no copper, gold, cious metals mining, is an enorsilver, iron, etc., miner can claim that their copper, gold, etc. is better than mously profitable business, and it anyone else’s so that they can raise is true that some mines are proftheir price. The implications of this kind of itable and some are even very market structure for industry profitability is that in the short run miners profitable. However, what about can make profits or suffer losses, and in in general and in the long run?” the long run their profits will be approximately zero. To understand, consider the reoccurring market cycle illustrated by the graph (on the opposite page). The typical pattern is that some outside factor like an increase in demand for some commodity will drive up its price. For example, in the late 1970s, inflation drove up the price of precious metals. This led to an increase in investment in gold mines in the early 1980s, and then an increase in production in the late 1980s. This increase in production coupled with European central bank selling in the 1990s sent prices downward. Mines were closed, merger and acquisition activity in the industry increased and production leveled off and investment declined. Then, in the early 2000s, with low prices, central banks halted their sales programs reducing supply, and the cycle started again. Since about 2002, gold prices have risen dramatically, investment in exploration and mine development have increased, and prices have started falling. From 1989 to 2006 the correlation between gold prices and the profitability of major North American gold miners has been 0.05 which means that there is essentially no correlation in the long run. In other words, gold miners at least have been chasing the cycle like a dog chasing its tail. When prices go up, they invest their increased revenues in expansion and lower their cut - off grades (i.e., process lower grade ores) which raises their costs. When prices fall, they cut back on investment and


“From 1989 to 2006 the correlation between gold prices and the profitability of major North American gold miners has been 0.05 which means that there is essentially no correlation in the long run. In other words, gold miners at least, have been chasing the cycle like a dog chasing its tail.” process higher grade ores to lower their costs. The result is that in the long run the spread between prices and costs stays about the same. There is a story familiar to most economists (which, sadly, passes for economist humor) that a student once asked Milton Friedman if he would pick up a $20 bill if it were lying on the sidewalk? He is reported to have answered “No, because in long run equilibrium it wouldn’t be there”— just like miners’ long run profits. ———————— John L. Dobra, Ph.D. is the director of the Natural Resource Industry Institute and Associate Professor of Economics University of Nevada Senior Fellow, Fraser Institute. ——— This article previously appeared on Fraser Institute’s Mining Facts blog: www.miningfacts.org/Blog/

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Ross Andreson/Mining Quarterly

Matt Zietlow, environmental manager at Goldcorp.’s Marigold Mine, talks about the addition of a larger truck shop and other features at the site.

Nathan Odle, senior training supervisor at Goldcorp.’s Marigold Mine, talks about interchangeable equipment for the simulator used to train employees for different vehicles. Ross Andreson Mining Quarterly

58 MINING QUARTERLY, Elko, Nevada FALL 2013

Marigold Mine thinks forward into the future By JOHN RASCHE Free Press Staff Writer

ELKO — From within a small trailer office, Training Supervisor Cody Gillihan operates an electric shovel through a PRO3 Immersive Technologies simulator at Goldcorp Inc.’s Marigold Mine. “Turn on the snow,” Senior Training Supervisor Nathan Odle told Training Coordinator Jesse Danner, who controlled Gillihan’s simulator from a nearby computer. Danner pressed a few keys and snow began to fall across Gillihan’s simulator screen. “We can do anything,” Odle said. “We can change the road conditions and make them


slicker. Or we could add animals. Or start a truck fire. ... This is the latest, the greatest, the baddest boy in town as far as simulation goes.” The Australian-made simulator, which costs around $2 million, is currently equipped to train employees on a P&H 4100 electric shovel and two 330-ton trucks, the 930E Komatsu and the EH500 Hitachi, Odle said. “Those vehicles are the bread and butter of our fleet,” he said. “The equipment is so big, so vast, it takes more time for people to get used to it.” The simulator will be heavily used in the next few months as the Marigold operation’s first P&H 4100 electric shovel is assembled, a process that could last until October. Once complete, the $3 million electric shovel will be able to move twice as much material as the operation’s diesel-fueled shovels. Trainees can quickly transition from learning to working by operating the shovel through simulation before the actual equipment is assembled, Odle said. “This is a far cry from what we used to do, 35 years ago, when I first started in this business,” he said. “I’d be the first guy to say, ‘you can’t teach me how to use a piece of equipment with a damn computer.’ But I’m here to tell you now, you can.” The simulator is just one aspect of the training program at Marigold, Odle said. The program uses 10- to 20-minute simulated scenarios that the equipment operators must work through while demonstrating efficient operating practices. The Ross Andreson/Mining Quarterly

See MARIGOLD, 60

Ralph Erquiaga, process manager at Goldcorp.’s Marigold Mine, talks about the Cell 18, a new 45-acre leach pad project at the site.

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Ross Andreson/Mining Quarterly

Cody Gillihan, training supervisor at Goldcorp.’s Marigold Mine, operates a simulator for a P & H 4100 electric shovel with a 75-yard bucket at the mine site.

Marigold ... Continued from page 59 operators are then scored on performance and competency with the equipment. “We’re trying to break old, bad habits and create new, good ones,” Odle said. “And we’re going to be able to move into production faster, smoother and safer. “ ... (Because) the bottom line is that even with all these fancy bells and whistles, there isn’t an ounce of gold on this property that’s worth anyone getting hurt.”

Ross Andreson/Mining Quarterly

Jesse Danner, Training Coordinator at Goldcorp.’s Marigold Mine demonstrates the computer program used with the simulator for a P & H 4100 electric shovel at the mine site.

60 MINING QUARTERLY, Elko, Nevada FALL 2013

Property Values Marigold is a joint venture between Goldcorp (who owns two-thirds) and Barrick Gold Corp. (who owns one-third), located 36 miles east of Winnemucca in Humboldt County. The open-pit mining operation controls 19,000 acres through ownership and lease, split equally between private and public land. The mine is also immediately adjacent to Newmont Mining Corp.’s old Trenton Canyon and Lone Tree mines.


Ross Andreson/Mining Quarterly

This view shows a liner being installed at Goldcorp.’s Marigold Mine for Cell 18, a new 45-acre leach pad project at the site. Marigold and the Wharf Mine in South Dakota are the only two Goldcorp mines in the United States, said Matt Zietlow, environmental manager for the mine. Most of Goldcorp’s operations are located in Canada and Latin America. Marigold’s low-grade ore mining operation was once a historic mining site along the northern end of the Battle Mountain-Eureka Trend in the early 1900s, before it became a larger-scale mine in the late 1980s, Zietlow said. “When Marigold first started, it was not only a heap leach pad, but it also ran a mill, which ceased production in 1999,” he said. “Since then, the operation has steadily increased in size, a little bit at a time.” Marigold now has about 350 employees, who mainly live in Winnemucca and Battle Mountain, Zietlow said.

Ross Andreson/Mining Quarterly

See MARIGOLD, 62

Matt Zietlow, environmental manager at Goldcorp.’s Marigold Mine, talks about Cell 18, a new 45-acre leach pad project at the site. At left, Ralph Erquiaga, Marigold process manager.

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Marigold Mine has added a new Atlas Copco Drill in the Mackey Pit. At right is an older drill. Ross Andreson/Mining Quarterly

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“It’s a nice mix (of people) for a decent sized mine, but yet small enough to where everyone knows everyone else,” he said. “You still have that small mine camaraderie.” Marigold currently has two operational surface mines, Mackey and Target 2. By time of publication, the company was still waiting on an environmental assessment decision from the U.S. Bureau of Land Management for a pit mine expansion. If the EA is granted, the mine’s plan of operations boundary would expand to match the land and lease position, the Target 3 pit would be approved for mining and the maximum annual mining rate would increase from its current 60 million tons a year to 150 million tons a year. A new leach pad expansion, known as Cell 18, was expected to be completed by the end of August. The expansion would add an additional 45 acres to the leach pad, See MARIGOLD, 64

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Marigold ... Continued from page 62

Ross Andreson/Mining Quarterly

Workers from Joy Global tend to a cab for a P & H shovel at the Marigold mine site.

64 MINING QUARTERLY, Elko, Nevada FALL 2013

which is situated in the same vicinity as the mine’s other leach pads. “Our entire leach facility is one contiguous block,” Zietlow said. “Marigold has always been about economy of scale. As a low-grade ore operation, you want to be as efficient as you can be, and move as many tons as you can to get as many ounces to the pad as possible.” The low-grade ore prevalent at Marigold averages approximately half a gram, or 0.017 ounces, of gold per ton of ore. Other additions to the mine include a new truck shop and warehouse. In order to stay ahead of the economic curve, Marigold welcomes any ideas from employees that could mean more efficient practices. “We have a continuous improvement program called Operating for Excellence,” said Process Manager Ralph Erquiaga. “We collect ideas and select things to improve efficiency, such as ideas that touch upon people, safety and margins. Then, we review the ideas and see if we can get better at them. “It’s a well thought-out process for how to improve all facets of our business.” Some of the new efficiency practices include filling the hauling trucks to the maximum capacity — to save time and money — and changing the method by which heavy equipment is transported —


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r u O ff a t S

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Marianne Kobak McKown Editor/Mining Quarterly mining@elkodaily.com

Nancy Streets Advertising Director nstreets@elkodaily.com

Betti Magney 775-748-2706 bmagney@elkodaily.com

Amber Eliades 775-748-2744 aeliades@elkodaily.com

Terra Josephson 775-748-2743 tjosephson@elkodaily.com

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to reduce the amount of wear-and-tear on the truck tires. These efficiency changes were designed to improve future growth and safety, Zietlow said, but the mine’s life really boils down to the gold price. “The price of gold is the ultimate longterm economic driver, particularly with lower-grade ores,” he said. “With our current plans, if nothing else changed and the price of gold is favorable, we could actually mine out pushing to about 2030. It all comes down to the economics and staying safe and efficient.” Creating Choices Goldcorp’s Marigold mine has also implemented a new program designed to make female employees more comfortable and confident in the workplace. Creating Choices, which offers quarterly workshop sessions for women, began at the corporate office in Vancouver, Canada, and has since been adopted by the company’s mines across the world. The sessions provide an opportunity to discuss “performance, goals, what (the women) want to do, where they want to be and how to get there,” said Danner, a facilitator for the program at the Marigold mine. Together with the other

Ross Andreson/Mining Quarterly

See MARIGOLD, 68

Tom Alexander, lead man at Goldcorp.’s Marigold Mine, monitors the position of haul trucks and other heavy equipment at the mine site. Alexander is also a shovel operator.

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General Moly reports $14.3 million loss Company looks for financial backer for Mt. Hope ELKO — General Moly reported a loss for its second quarter and the company continues its search for a new financial backer. The company announced its unaudited financial results Aug. 2. General Moly owns 80 percent of Mt. Hope, a molybdenum mine in development about 21 miles north of the town of Eureka. Net loss for the quarter ended June 30 was $14.3 million, or $0.16 per share, compared with a loss of $2.7 million, or $0.03 per share, for the same period a year ago. The primary reason for the net loss during the second quarter was an $11.5 million non-cash charge relating to the May 14 warrant cancellation associated with the mutually terminated $125 million subordinated debt agreement between General Moly and Hanlong Mining. Excluding restricted cash, the company’s cash balance at June 30 was about $35 million compared with $68 million at Dec. 31 and $57 million at March 31. During the second quarter, cash use of $24 million was the result of Mt. Hope Project development costs, as well as general and administrative expenses partially offset by the receipt of $2 million in contribution payments from POS-Minerals Corp. General Moly was told in March that China Development Bank had provided instructions to its legal counsel to suspend work on the $665 million Term Loan. This suspension relates to reports that Liu Han, chairman of Sichuan Hanlong Group, has been detained by Chinese authorities. In December, General Moly and POS-Minerals, as members of Eureka Moly, LLC, agreed to hold $36 million of the approximately $100 million received from POSMinerals’ December contributions in a reserve account to maintain additional liquidity until the company arranges full project financing. “We have spent the past few months in discussions with a number of potential strategic partners and investors as we explore a variety of financing alternatives including equity investments, project level investments and debt financings to determine which would provide the best outcomes for our shareholders in the current market,” said General Moly Chief Executive Officer Bruce Hansen. “While we expect the financing process to take time, the company has received interest from potential strategic investors both in and outside of China. Multiple parties have signed nondisclosure agreements and are currently engaged in due diligence on the project. “As we proceed toward full financing at Mt. Hope, the company will continue to prudently manage our unrestricted cash position of $35 million at the end of the second quarter with an additional $36 million in restricted cash. Steps we have taken to trim our cash burn rate include significantly reducing construction activities and engineering expenditures at Mt. Hope and deferring payments on equipment orders.”

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Mt. Hope Project construction Substantial progress has been made on the preliminary construction activities at the Mt. Hope project site including cultural clearance, clearing and grubbing, wood harvesting, and the development of early construction water. Kautz Environmental Consultants completed adequate field mitigation so that, once financing is secured, construction can proceed unencumbered by cultural sites, according to General Moly. Ames Construction has cleared and grubbed approximately 1,800 acres in preparation for starting major earthworks. The mine, process plant, and tailings dam areas and associated roads have been substantially cleared. Ames Construction also has completed four miles of water pipeline — about 50 percent of total planned — to supply construction water from the permitted well field to the plant site. Further activities have been substantially reduced as a result of the


Ross Andreson/Mining Quarterly

This panoramic view shows ground work that has been completed on the General Moly Mt. Hope mining project. delay in financing for the Mt. Hope Project and will resume as alternative financing becomes available. Mt. Hope Project water rights and permit appeals In 2012, the Nevada State Engineer completed issuance of all water permits for the Mt. Hope Project and approved the company’s Monitoring, Management and Mitigation Plan, also known as the 3M Plan. In April 2013, the 3M Plan was challenged in an appeal and the appeal was rejected by the Nevada State District Court. The petitioners recently filed an appeal of the District’s Court Order to the Nevada Supreme Court, and petitioners’ opening briefs were filed July 26. Eureka Moly response brief is due August 26. The water permits were also challenged in an appeal to the District Court by Eureka County and two parties of water rights holders in Diamond and Kobeh Valley, and the appeal was rejected by the District Court in June

the Mt. Hope Project. Eureka Moly has intervened and, along with the federal government, filed its opposition to the motion for a preliminary injunction. The court set oral argument regarding the motion for a preliminary injunction on Sept. 3. The process for issuing the ROD involved an exhaustive environmental analysis and review that lasted more than six years, and included extensive public and cooperating agency input. The company supports the very robust and legally and technically defensible work completed by the BLM and believes that the ROD complies with all federal statutes and rules.

2012. The petitioners thereafter filed an appeal to the Nevada Supreme Court. Briefing has recently been completed including appearances by Amicus Curiae supportive of the company and the State Engineer’s position. The Nevada Supreme Court has consolidated the 3M Plan appeal and the water permits appeal. Presently, the Supreme Court has not issued a ruling or set a hearing date for the appeal, until the 3M Plan matter is fully briefed later in the third quarter of this year. Notwithstanding, the water remains available to the company for use at the Mt. Hope Project. In February, Great Basin Resource Watch and the Western Shoshone Defense Project filed a complaint, and a motion for preliminary injunction, against the U.S. Department of Interior and Bureau of Land Management in U.S. District Court, seeking relief under the National Environmental Policy Act and other federal laws challenging issuance of the record of decision for

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Marigold ...

General Moly ...

Continued from page 65

Continued from page 67

two facilitators, Christy Broadway and Ginger Peppard, Danner aims to better understand the hopes and expectations of the operation’s female population of 43 employees. “The program has worked out really well,” Danner said. “We’ve seen a lot of blossoming in personalities ... Some of the more timid women have come out of their shells and are now able to take the stage to express their ideas.” One element of the program at requires women to speak before an elkodaily.com audience, Danner said. “The sessions help them find their comfort level and ... show people that they’re serious (about their jobs),” she said. Although men are a majority of Marigold’s workforce, Danner said female employees are known for excelling in different aspects. “Women have a really good record of attendance and of taking care of the machinery they run,” she said. In November, Danner will join Creating Choices facilitators from other Goldcorp operations at a worldwide conference in Mexico City. After the conference, the company will proceed with the program’s “Phase Two.” Marigold man-

Hope Project. Through June 30, Eureka Moly has made deposits of $73 million on equipment orders and has paid $12 million into an escrow arrangement for electricity transmission services. Eureka Moly has ordered or purchased most of the long-lead milling equipment, haul trucks, mine production drills and has entered into a letter of intent for the purchase of two electric shovels. The company is planning the placement of firm orders for other mining and process equipment pending timing of full project financing. Approximately 70 percent of the planned spend on process equipment has been defined through hard bids and purchase orders and is estimated to remain on budget. Further, about 75 percent of planned spending on mining equipment has been committed with cancelable purchase agreements and is also estimated to remain on budget. Some of the committed spending is subject to Producer Price Index-based escalation and additional holding costs if there are extended delays, and some agreements would be subject to cancellation. The project remains in a construction-ready status pending final financing.

Video

Ross Andreson/Mining Quarterly

Duane Peck, General Manager at Goldcorp.’s Marigold Mine talks about new projects. agement has been extremely supportive of the program, Danner said. “This company is rare,” she said. “They want you to be happy. They want you to stay here and they treat you as such.”

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Resident and history enthusiast Jan Petersen gives a tour of Tuscarora’s cemetery July 20 for the opening of the Tuscarora Society Hall.

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Silver veins to clay pots Tuscarora goes from mining town to artist community By DYLAN WOOLF HARRIS Mining Quarterly Staff Writer

TUSCARORA — Long before Tuscarora became known for its art, where students learned the craft of throwing clay on a pottery wheel, it was a booming mine town due to the discovery of rich silver veins. But about eight years before the silver rush of 1876, hopefuls were looking for gold in an area that hadn’t seen much development, though Peter Skene Odgen had guided groups through Independence Valley, looking for beaver in the 1820s. Jess Ranker Collection-Northeastern Nevada Historical Society Quarterly

Tuscarora School house and Dexter Mine. The school was built in the 1880s.

See TUSCARORA, 70

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 69


Tuscarora ... Continued from page 69 In the late 1860s, an Indian tipped off a trader who resided near the Humboldt River, of all but undiscovered gold 50 miles north, according to a copy of a handwritten history dated June 1899 of unknown author. The history was found in the archives of the Northeastern Nevada Museum and later printed in 2008 in the Northeastern Nevada Historical Society quarterly under the title, “Tuscarora Mystery.” A party of prospectors from Austin headed north in 1876 and were instrumental in developing the Tuscarora mining district, which was named after a ship. Two in the party, brothers John and Stephen Beard, built their home about three miles southwest of present-day Tuscarora. “Their home, constructed of adobe brick, was the first permanent structure,” wrote John M. Townley, whose article, “Tuscarora” appeared in the Northeastern Nevada Historical Society’s summer and fall, 1971 quarterly. Gold was discovered, but not in an abundance that created enough wealth for the prospectors. Because placer mining relies on water, prospecting was a seasonal endeavor in the valley and occasionally required laborious ditch digging. Dylan Woolf Harris/Mining Quarterly

Above: This grave site, marked with an illegible wooden gravestone sits in the Tuscarora Cemetery surrounded by a small wooden fence. At right: This bedspring marks the grave of artist Lee Deffebach, which reads, “Resting.”

Collection-Northeastern Nevada Historical Society Quarterly

Dexter Mill with sagebrush wagon c. 1911.

70 MINING QUARTERLY, Elko, Nevada FALL 2013


“A combination of hard work and slim wages caused many miners to abandon the district for better paying areas,” Townley wrote. “… Attempts to work the mill were unsuccessful as well.” Mother Nature seemed bent against those seeking success and riches. “At one point a gigantic swarm of grasshoppers infested Independence Valley and crushed bodies of the insects filled the battlebox and sluices to the degree that gold was impossible to separate,” Townley wrote. After the completion of the Central Union Railroad, many Chinese laborers looking for work found themselves in the Tuscarora district as lessees and owners of the placer deposit claims that previous prospectors considered unprofitable. The Chinese population, which outnumbered the white population in 1870 104 to 15, began building roads, digging ditches and importing water supplies. The Mining and Scientific Press estimates in September 1869 about 50 Chinese initially started working placers. Silver Rush Mt. Blitzen hid a rich silver ore vein that was tapped in 1876. Within two years, the population grew substantially. Jess Ranker Collection-Northeastern Nevada Historical Society Quarterly

See TUSCARORA, 72

Miners burn sagebrush as fuel for the Dexter Mill. Sagebrush was used as fuel for the mill in the late 1800s and early 1900s.

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 71


Tuscarora ... Continued from page 71

Dylan Woolf Harris/Mining Quarterly

President of Friends of Tuscarora and Independence Valley, Gail Rappa, right, cuts a red ribbon at the Tuscarora Society Hall’s grand opening July 20. Holding the ribbon are Elko County Commissioner Jeff Williams, left, and former County Commissioner Shari Eklund-Brown.

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“By the time 1878 rolled in, the population had swelled to 5,000. The town was larger than the county seat, Elko,” according to The Northeastern Nevada Historical Society’s Winter 1983 quarterly, titled “Tuscarora Never Died.” Townley, on the other hand, wrote the peak population was about half that at 2,500. The Grand Prize Mine produced about $2,500 per day for about a year and a half. Businesses followed the migration and an Elko to Tuscarora stage line made for more convenient travel. When it came to decide where to drink, eat or get entertained, residents had options. Tuscarorans, on the whole, had an indifferent attitude toward religion, according to Townley. The Times-News, in its April 25, 1881, edition, wryly wrote: “This at all events isn’t the most heathenish place in the United States. … There’s a person in this town who never heard of Easter until he came to Tuscarora.” The article didn’t elaborate from where this person had haled. The “Tuscarora Mystery” author noted among the professionals who flooded into town with the silver rush were “some few preachers. … It is needless to say that the preachers did not

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remain long.” The town had a Catholic and a Methodist church, according to the Society Hall history. The town also built a jail, though serious offenders were taken to Elko. Various histories reference rough and rowdy crowds. Townley said “claim jumping” occurred, in which thieves would by force or firearm take property, typically not with the goal of mining it themselves, but selling it back to the original owners. Slowing As is often the case, the boom was followed by a bust when mining operations slowed significantly. The Tuscarora Society Hall history — compiled of writings from Howard Hickson and Tony Primeaux with added information by Shawn Hall and Jan Petersen — states that in 1880 the population fell though the area had 10 mines and three mills operating. By 1881, production was in flux, and “the citizens (were) in the throes of uncertainty and the population plunged to just a few hundred stubborn souls,” Townley wrote. The Times-News apparently held out

The Tuscarora Society Hall, which was built about 1878. Dylan Woolf Harris Mining Quarterly

See TUSCARORA, 74

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 73


Museum Photo; donated by Warren Butlers

A Chinese man in early Tuscarora.

Tuscarora ... Continued from page 73 hope. On Feb. 15, 1881, it published: “Every person at all acquainted with the situation of Tuscarora, as compared with last February, must admit, that we have made a steady and healthy advance. … The deeper we go into the ground the better our ledges appear.” The Minority Tuscarora had the second-largest Chinatown in the West in the late 1800s and early 1900s, according to the Northeastern Nevada Historical Society Quarterly. Hanging over the town’s significant Chinese population — who were legally allowed to own claims, which was unique — was a xenophobic sentiment that is too familiar when cultures clash. After the silver boom, the district saw a shift in demographics to a white majority. It wasn’t long before an anti-Chinese group was established, who opposed immigration and supported deportation. A write-up in the Times-Review on April 4, 1881, made no effort to disguise disdain for a Chinese celebration that “consisted in the firing of bombs and fire crackers and other heathenish demonstrations.”

74 MINING QUARTERLY, Elko, Nevada FALL 2013


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Tuscarora town map, Oct. 1890. Population according to Sanborn-Perris Map Co. Limited. Later, the same article questioned why “the coyote yell of the copper colored barbarians” had to take place on a Sunday when the “superior race” preferred reverence. The paper did make a point to argue against stabbing or stoning Chinese — who were often referred to as Celestials — which presumably was a response to others who either called for such attacks or carried them out. Opinions existed that Chinese workers sent most of their earnings home and that they weren’t as invested long-term in the area, always eyeing home, planning to return after using the resource. All the while, Townley revealed, many white workers were doing the same thing except planning on retiring in San Francisco instead of Asia. Chinese who weren’t placer mining looked for other fields of employment as cooks, wood choppers or servants. “Many white families had one or more Chinese employed in their household,” Townley writes. More than half of the Chinese women worked in brothels. Chinese also turned to quasi-legal professions, such as selling alcohol to Indians or running opium dens. On Feb. 15, 1881, the Times-News wrote, “For several days, an old Chinaman has been peddling around town some very curiously and ingeniously designed artificial flowers. They have all the beauty of the natural, and the smell is of opium.” See TUSCARORA, 77

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 75


A bird’s eye view of Tuscarora in 2013. Marianne Kobak McKown/Mining Quarterly

Collection-Northeastern Nevada Historical Society Quarterly

Tuscarora overview at the turn of the century, 1800s to 1900s.

76 MINING QUARTERLY, Elko, Nevada FALL 2013


Tuscarora ... Continued from page 75 The justice system also seemed to give Chinese less than a fair shake, convicting a number of laborers of theft though despite them not understanding the charge. “Often men would be escorted to the city limits and told not to return,” Townley wrote. “The bodies of unknown Chinese were often found in the desert, evidently victims of robbery.” The last Chinese laborer died in the 1930s. Pottery School In Washington D.C. in the early 60s, Dennis Parks became tired of the city’s inescapable politics and tired of worrying that his town might be a prime target for atomic siege by the county’s enemies. He began looking for a place to move in Virginia or Maryland, he said. Eventually, the Parks family headed West in 1962 and stopped in Tuscarora for a visit. He had met a couple who had shared photographs of the area. Over the next four years, he completed graduate school and then taught in Illinois then California. “All this time Tuscarora kept coming up in my mind,” he said during a phone interview. “In 1966, I decided to try opening a pottery school,” he said. Thus the Tuscarora Pottery School began. He taught college in Clairmont, Calif., but during the summers he was able to run the school and was able to run the school for a full semester while he was on sabbatical. “Then I was supposed to go back in 72,” Parks said. “I had to write an apology letter to the college saying I

“He was slurring words and probably tiring as we closed in on a compromise: on Gold Street I would restrict myself to the north half and he would stay to the south. I would shut up on the issue of loud music being played at night and in return he would forego shooting me in the stomach.” — Dennis Parks Author of “Living in the Country Growing Weird: A Deep Rural Adventure.” wasn’t coming back.” Parks said students enrolled from across the globe including Belgium, Australia and Israel. In the 80s the school enrollment slowed and was forced to close except in the summers, which Parks son, Ben, now runs. Parks published a book about his family’s journey in Tuscarora titled, “Living in the Country Growing Weird: A Deep Rural Adventure.” In it, Parks recounts growing a garden, growing weary of suspicious visitors and growing irritated at a neighbor who played music loudly one night. When Parks confronted the man, called Harold, who Parks described as a belligerent drunk, he had a rifle. “He was slurring words and probably tiring as we closed in on a compromise: on Gold Street I would restrict myself to the north half and he would stay to the south. I would shut up on the issue of loud music being played at night and in return he would forego shooting me in the stomach,” Parks wrote. The incident didn’t end immediately as Harold fired a bullet near Parks’ feet, which seemed to be enough to calm tempers that night.

Today Parks wasn’t the first artist — renowned Della Phillips resided in Tuscarora prior to the Parks family’s arrival. Today, a “community of artists” calls Tuscarora home, according to Gail Rappa, president of Friends of Tuscarora and Independence Valley and jewelry maker. About 15 full-time residents reside in town, and about 15 more reside in Tuscarora seasonally. The town opened Tuscarora Society Hall and Museum July 20, which in bygone eras has served as a Mason’s Lodge, a tavern and a brothel. Residents of Tuscarora supported the hall as a means of sharing the area’s history with visitors. Rappa said the breadth of Tuscarora’s culture shouldn’t be overlooked. At its peak, Tuscarora had dance halls, opera houses, marching bands, a baseball team, etc., she said. The first public school was built in 1881 and another followed in 1889, according to Townley.

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Company turns old tires into new troughs By JOHN RASCHE Free Press Staff Writer

John Rasche/Mining Quarterly

ELKO — One miner’s tire is another rancher’s trough, thanks to a small family business located in Alva, Wyo. Giant Rubber Water Tanks Inc. sells just what the name implies. The company recycles large, industrial tires from mining operations and turns them into durable water tanks for ranches. Tires used on large mining vehicles can range from 8 to 12 feet in diameter.Once those tires wear out,they are thrown out, said Beth Reilly, co-owner of Giant Rubber Water Tanks Inc. “We provide a service to the mines by recycling the tires,” Reilly said. Tires that are not recycled “environmentally add to the carbon footprint when added to the (waste) pit. Old tires are no use to them, anyway. We take a problem for the mines and turn it into a service for clean water and water management.”

Beth Reilly, co-owner of Giant Rubber Water Tanks, leans against a hollowed-out mining truck tire, which can now be used as a ranching trough, outside the 2013 Elko Mining Expo in June at the Elko Convention Center.

See WATER TANKS, 80

78 MINING QUARTERLY, Elko, Nevada FALL 2013


Tunnel Radio provides “all-in-one” wireless communication By JOHN RASCHE Mining Quarterly Staff Writer

ELKO — Texting in the workplace can make you appear distracted and unprofessional. But when your workplace is a thousand feet underground, there are exceptions — which is why Tunnel Radio offers handheld radios that are capable of texting among its extensive range of wireless communication products. “Some people like to use (texting), like if someone just wants to send up a part number or something like that (from below),” said Ken Henry, Nevada area manager for Tunnel Radio. Texting, however, is just one small feature of Tunnel Radio’s underground mining communications system — known as a digital leaky feeder system — that incorporates wireless communication, wireless tracking, gas sensing and system diagnostics. Tunnel Radio’s wireless communication, in partnership with Motorola, uses both Very High Frequency (VHF) and Ultra High Frequency (UHF) signals that can be used in underground mining operations. “Tunnel Radio’s MSHA-approved Ultracomm Communications system keeps you connected at all times, under all conditions, helping you improve safety, react faster to problems, make more informed decisions and maintain or improve productivity,” according to the company’s promotional materials. The Ultracomm Communications system operates through underground cables, amplifiers, splitters and junction boxes, Henry said. “The (system’s) digital repeater can transmit and receive (broadcasts) immediately,” he said. Tunnel Radio’s MineAx Wireless tracking system allows authorized John Rasche/Mining Quarterly

See RADIO, 80

Ken Henry, Nevada area manager for Tunnel Radio, exhibits the company’s Ultracomm system at the 2013 Elko Mining Expo in June at the Elko Convention Center.

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Water Tanks ...

Radio ...

Continued from page 78

Continued from page 79

The tires are received from approximately 50 dealers, including mines and other tire disposal businesses throughout the western United States, Reilly said. The tires are delivered directly from the mine to the ranch, where a top side is cut off. Cement is then poured down into the center to seal the hole.Once the cement dries,the tireturned-trough can hold between 400 and 1,200 gallons of water. “Nothing makes you look more like an environmental hero that recycling a tire,” Reilly said. “One (recycled) tire is 10,000 pounds less in your waste pit.” Giant Rubber Water Tanks began with one Wyoming rancher in the early 1980s,according to the company’s promotional material. The rancher, Gerald Mahoney, “wrestled with the replacement costs and untimely demise of many traditional water troughs on his ranch.” After touring a nearby coal mine, Mahoney saw potential in the tires and acquired one from the operation. He developed a tool that could cut the tire efficiently and turned it into a durable water tank that was resistant to freezing. Soon, his neighbors wanted one, too. The company has grown since 2002, after Mahoney sold his part-time venture to his daughter, Beth Reilly, and her husband Pat. The company recycles between 4,000 and 5,000 tires a year, Reilly said. Giant Rubber Water Tanks Inc. connects the mines with ranchers and farmers, she said. The U.S. Department of Agriculture has programs to install those tanks in droughtstricken areas. On average, the tires used are 12 to 13 feet in diameter, Reilly said. The company also provides reports to the mines about recycling statistics. The company works with several local mines, including Barrick Gold Corp.’s Cortez Hills and Goldstrike, Reilly said. Giant Rubber Water Tanks also work with tire manufacturers. “It’s a fun business to be in because you’re solving problems for both sides,” Reilly said. For more information, call 307-467-5786 or visit www.giantrubberwatertanks.com.

users remote or onsite access to critical data from their computers or mobile devices. Radio Frequency ID tags are assigned to each underground worker, who can wear them on their helmets or belts. Monitoring where workers are at all times not only allows you to keep an eye on workforce efficiency, but also helps you keep track of them in times of danger, Henry said. “In the case of an emergency — boom! — you can see where everyone is,” Henry said. The company’s wireless gas sensing system is able to detect as many as four gases: methane, oxygen, nitrogen dioxide and sulfur dioxide. “(The system can) wirelessly transmit the data from the source to the control room ... and combine seamlessly with Tunnel Radio MineAx tracking to simultaneously send gas level readings and the whereabouts of personnel to your topside computer system,” according to the promotional material. The sensing system also provides real-time tables and graphs of gas measurements for the past 30 days, allowing operations to detect problems and analyze ventilation system effectiveness. Tunnel Radio’s Monitoring System program ties the digital leaky feeder system together, pulling information from the tracking and gas sensing systems to provide the full picture of operation. The web-based software transmits “a ‘look down’ map of your operation to your laptop, tablet, smartphone or computer that instantly gives you the big picture, any time, anywhere,” the promotional material states. “Our customers have the ability to get into the system and troubleshoot remotely 24/7 through system diagnostics,” Henry said. Henry said Tunnel Radio equipment is used by many mines within the region, including operations owned by Barrick Gold Corp. and Newmont Mining Corp. “We’re definitely an all-in-one solution,” he said. For more information about Tunnel Radio, call the Elko office at 753-4670 or visit www.TunnelRadio.com.

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Marianne Kobak McKown/Mining Quarterly

Above: A Hitachi 5500 shovel loads a 793 Caterpillar haul truck, while another truck waits at South Payraise Pit. Below at right: Nathan Bennett, Newmont Mining Corp.’s chief engineer for surface engineering at the Payraise Pit, explains the two phases of the project.

Payraise to produce until 2014 By MARIANNE KOBAK McKOWN Mining Quarterly Editor

ELKO — Newmont Mining Corp.’s Payraise Pit may finish production by next year. Payraise is part of Newmont’s Genesis district, which consists of Genesis, West Genesis, Bobcat, Payraise, Beast, Bluestar Ridge, Northstar and Sold pits. By 2000, the Genesis district was depleted with the exception of Payraise. In January, Newmont began expanding the district and gave several of the pits new names. The Genesis pit became Silverstar, West Genesis became Goldstar and Bobcat is called Bobstar. These renamed pits were scheduled to start producing ore by next year. However, Payraise started producing ore in 2012. Payraise is west of Silverstar, said Nathan Bennett, chief engineer of surface engineering. “It’s a couple thousand feet long and 800 feet wide and has two parts, North Phase and South Phase,” he said. “The North Phase was part of West Genesis.” Newmont should be finished mining Payraise in early 2014. “Ounce placement will be complete, but we will still leach,” Bennett said. “Most is low grade and most is oxide leach, and there is a fair amount of oxide mill.” The average grade of the oxide is 0.07 and the average grade for the leach is 0.01. “Anything above 0.05 is going to the mill,” Bennett said. “Since it’s oxide, it has very good recovery and good throughput. We have to run it in batches.” See PAYRAISE, 84

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Payraise ... Continued from page 82

Marianne Kobak McKown/Mining Quarterly

A Hitachi 5500 shovel prepares to load a 793 Caterpillar haul truck at South Payraise Pit.

Newmont runs 15,000 tons through Mill 5 and it has “a high recovery,� he said. “When we run oxide, 90 percent is from Payraise, but 95 percent of the time (Mill 5) is processing Gold Quarry,� Bennett said. While Newmont continued mining Payraise, the haul road was moved so it runs between the North and South phases. “We put together a haul road optimization team and from the previous haul we shaved 20 seconds off that,� Bennett said. “That’s what we look at, is what can we do to improve.� Miners blast on Payraise about twice a week, Bennett said. Most blast patterns are 500 to 600 holes, but the largest on Payraise was 1,500 holes, Perrin Slepsky, shortterm planning engineer for the North area told the Mining Quarterly in November. Four drills can put 40 to 50 holes in the pattern per shift, and after each blast, it takes about a week and a half to move the ore off the bench, she said. Most benches are 40 feet high on Payraise. When the Mining Quarterly visited Payraise in July, miners were clearing a bench of blasted rock. A Hitachi 5500 shovel with a 43-yard bucket loaded 793 Caterpillars, which are 240-ton haul trucks. “The shovel can load the trucks in three to five passes depending on the density of material,� Bennett said. The site has four Hitachi shovels — three 5500s and one 3600.

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Marianne Kobak McKown/Mining Quarterly

Above: A track dozer works to take the failure plain out of a bench at South Payraise Pit. At right: A drill waits to be moved at the North Phase of the Payraise Pit. Below at right: A Hitachi 5500 shovel loads a 793 Caterpillar haul truck, while another truck waits at South Payraise Pit. “The Hitachi 3600 has a smaller bucket but it swings a little faster,” Bennett said. “It’s been in production about a year and cost about $8 million.” Carlin Area The Genesis district is one part of Newmont’s Carlin area. Newmont employs 2,200 people at the Carlin area and the life of the mines in the area extends to 2032, Bennett said. “We also are looking at new projects — Green Lantern, North Lantern and Lantern 3,” he said. “There are about 23 present and future pits in the Carlin area.” Newmont has four leach pads in the Carlin area — one for property, Emigrant, North Area and non-property, Bennett said. The non-property is for ore to a royalty agreement.

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 85


Fire Creek yields 1,435 tons of 3.49 opt gold ELKO — Klondex Mines Ltd. reported a targeted exploration project in June yielded an average grade of 3.49 ounces per ton of gold at its Fire Creek property. Fire Creek is near Crescent Valley in Lander County and is the flagship of Klondex’s four Nevada properties. The company reported July 26 that its underground development program targeting the Joyce and Vonnie structures yielded 1,435 tons of mineralized material during June at an average grade of 3.49 ounces per ton of gold using a 50 opt cap on gold sample results. The underground development program was expected to continue through the remainder of 2013. Assays were performed by SGS Minerals Services of Elko, an independent laboratory, under the supervision of Klondex staff. June’s 1,435 tons are in addition to 682 tons in May, for a total of 2,117 tons, which were shipped to Newmont Mining Corp. for processing. Klondex and Newmont entered into the processing agreement at the end of July. Under the agreement, Newmont is responsible for the handling, milling and refining of minerals as well as tailings disposal, and Klondex is responsible for delivering the material. Shipments will be in lots of 1,000 tons up to 9,000 tons in 2013; the shipments may continue as needed through the end of 2014 as high grade material is generated. The initial shipment of 1,000 tons of Fire Creek highgrade ore to Newmont began on Aug. 5, and processing

began Aug. 12. Klondex expects to receive payment for this shipment in the third quarter. “The agreement with Newmont continues our ongoing focus of de-risking Fire Creek and building Klondex into a profitable and strong mining company,” said Klondex President and CEO Paul Huet. The initial partial upfront payment of 60 percent will be paid to Klondex by Newmont, based on Newmont assays. The 40 percent balance will be paid based upon finalization of settlement assays. July activities were expected to be more in line with May’s development, resulting from the areas of the project being developed. “We’re extremely encouraged by the grades and continuity of widths encountered during this month’s program along the Joyce and Vonnie structures and look forward to shipping our material in the coming weeks,” Klondex General Manager Mike Doolin said July 26. “Proceeds received from monetizing our material will be used toward funding a second drill, follow-up work on recent discoveries, and also toward continued waste development in anticipation of our 2014 bulk sampling program. “Our resource estimate is progressing well and will be

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released within the coming weeks,” Doolin said. “In addition, while our team is focused on the exploration and development program, our vent raise contractors are making steady, but slower than expected progress, and now anticipate completion by early September.” In August, Klondex also converted Fire Creek Mine to electrical grid power from generator power. The power line is now fully connected and energized by way of the Klondex-owned substation built in 2012. The substation was connected to the NV Energy electrical grid earlier this year. As a result of this achievement, Klondex expects increased efficiencies in its development work, in addition to a significant reduction in unit cost for electricity. “We’re extremely pleased with the timely progress the team is making during this pivotal year for Klondex,” said Fire Creek General Manager Mike Doolin. “Processing the Fire Creek material through Newmont’s milling facility allows us the opportunity to monetize the mineralized material from the underground development program. “Energizing Fire Creek with grid power allows greater flexibility and support for our increasing power needs as we continue to develop Fire Creek. Assuming our consumption increases on average by 30 percent and the unit cost decreases to $0.12/kWh, we expect to realize a savings of approximately 25 percent of the current power costs.”

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Coeur Mining reports $35 million loss for second quarter ELKO — Coeur Mining Inc. reported a loss for the second fiscal quarter. The quarter results were announced Aug. 8. Net loss for the second quarter was $35 million, or $0.35 per share, compared with net income of $12.3 million, or $0.14 per share, in the first quarter. The loss was largely due to a $32 million one-time charge for the settlement of the Rochester claims dispute litigation and a $17.2 million non-cash writedown for the company’s strategic investments. The company’s sales for the quarter totaled $34.9 million, compared to $39 million in the first quarter. Cash flow from operating activities of $3.4 million in the second quarter declined from $5.6 million in the first quarter due to a $10 million cash portion of the disputed claims settlement, an increase in ore placed on the leach pad, and lower metal prices. The Rochester mine in Nevada produced 843,845 ounces of silver (up 30 percent) and 9,404 ounces of gold (up 8 percent) over the first quarter. Those production numbers were less than what were expected, due to poor crusher performance, according to the report. Cash operating costs per silver ounce for Rochester were $14.75, which were 9 percent higher than the first 2013 quarter. The company’s Palmarejo mine in Mexico, however, reported an increase in metal production for the second quarter. Palmarejo silver production increased by 24 percent

and gold by 23 percent since the first quarter. “Our second quarter operating performance improved significantly compared to this year’s first quarter and last year’s fourth quarter,” said Mitchell J. Krebs, Coeur’s president and CEO. “Our operations and technical teams deserve tremendous credit for the improvements at Palmarejo since last year.” In total, the company reported 4.6 million ounces of silver and 60,757 ounces of gold mined during the second quarter, which represent an increase of 21 percent and 7 percent over the first quarter in 2013. The company reported $204.5 million in metal sales, cash flow from operating activities of $63.3 million, and capital expenditures of $27.2 million during the second quarter. The company also reaffirmed its 2013 full-year production goal of 18 to 19.5 million ounces of silver and 250,000 to 265,000 ounces of gold. “Continued robust silver production from San Bartolomé and higher than planned gold production from Palmarejo are expected to offset lower than expected production levels at Rochester, which encountered poor crusher performance in the first half of the year,” Krebs said. “We can remain enthusiastic about the

“Continued robust silver production from San Bartolomé and higher than planned gold production from Palmarejo are expected to offset lower than expected production levels at Rochester, which encountered poor crusher performance in the first half of the year.” — Mitchell J. Krebs Coeur Mining President and CEO

expansion initiatives underway at Rochester, which we believe can make this long-running operation our largest cash flow generator in the next five years.” Coeur Mining is investing approximately $4 million this year to expand the capacity of Rochester’s primary crusher from 9 million tons to 14 million tons. The company is also expanding the mine’s heap leach capacity to approximately 67 millions tons, which is expected to cost $15 million. The expansion is designed to accommodate sustained higher production rates driven by the processing of ore contained in historic stockpiles.

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Behavioral strategist works with mining industry Dr. Boyce talks with the Mining Quarterly ELKO — Dr. Thomas E. “Ted” Boyce became a columnist for the Mining Quarterly last year and is president and senior consultant with the Center for Behavioral Safety, LLC, a Nevada-Based safety and leadership consulting firm with offices in Reno. Boyce helps organizations solve business problems with person-centered solutions that draw from his training and experiences as a behavioral strategist. For nearly 20 years, Boyce has shared his practical knowledge on motivation, persuasion, authority and influence to both public and private organizations representing a variety of industries including mining. Recently, Boyce was interviewed by Mining Quarterly Editor Marianne Kobak McKown.

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MQ: Dr. Boyce, you are a behavioral strategist. How would you explain what you do to someone who knows nothing about your work? Boyce: Behavioral strategist is a short-hand way to convey my training as an applied experimental psychologist who practices in industrial and organizational settings. Specifically, as an experimental psychologist I’m trained to collect behavioral data with methods that would pass the test of experimental rigor and analyze and interpret these data from a large body of psycho- Thomas Boyce logical research. As an applied psychologist, I develop and help my clients put in place tools (often based on my analysis and interpretation of an issue they’ve sought my help with) to solve real-world problems. As an industrial/organizational psychologist I practice mostly in business settings. So, a behavioral strategist helps to identify and more clearly define human performance problems and their causes and ultimately designs and implements solutions to those problems. I do so from a body of behavioral science that has a 120-plus-year history. MQ: How long have you been in this field? Boyce: I have been working in the psychology field for nearly 20 years now. My early work focused on community-based issues, such as traffic and pedestrian safety. Our work attracted a lot of attention so I did a project with Coca-Cola that led to another with an engine-bearing manufacturer who was concerned about the driving safety of their employees to and from work in rural Virginia. The success of that project led us to focus on safety issues inside the plant. And this marked my formal transition to industrial safety, the mainstay of my work since 1999. MQ: Why did you go into this field? Boyce: That’s a loaded question. I could speak on that for some time. But, I’ll give you the short version. I had always been interested in human motivation from the time I played little league baseball. I found it interesting that some kids just did not want to be at practice and others wanted it to last forever because they were having so much fun. As I got older, I found that I wasn’t equally motivated to do all tasks. Moreover, I hated some classes at school that I was really good at and loved others in which I struggled more. So, when I got to college I took a psychology class called the Experimental Analysis of Behavior. The basic premise of that class was that behavior, when understood, was orderly and predictable. A couple of demonstrations that illustrated how when we change the physical environment of the person behaving in certain ways we get very different behaviors had me hooked. It was what I had been looking for. After realizing how powerful these concepts were, I just knew I wanted to make a difference on a large scale. So, when it came time to apply to graduate schools, I found a professor at Virginia


Tech who was using these ideas to develop programs to impact large groups of people rather than just individuals. He was just starting to work with business and industry so I came along at the right time. At UNR, I replicated the set-up I was working in at Virginia Tech. The rest, as they say, is history.

MQ: How long were you a professor at the University of Nevada, Reno? Boyce: I was a full-time professor for 5 years, and, during this time I was very successful, publishing, bringing in grant money, and teaching classes that were always well-enrolled and evaluated very highly. One year I was the finalist for a state-wide teaching award. Someone who had been a professor for 30-plus years and near retirement ended-up winning. I was told by a member of the committee that I was the youngest ever finalist and that politics often play a role in these decisions. Here’s an interesting aside, I developed and published about an innovative teaching strategy that helped get me enough attention for this award. Also, I later helped one of my Ph.D. students to start a learning center in Reno that has now been replicated in three states. All of this was done using the very same research, theory, and application we used to improve human performance in industry. MQ: Why did you leave academia? Boyce: Technically, I never left academia. I still have an adjunct faculty appointment at UNR. But, to your question, the realization of how political academia is together with a university in turmoil after the departure

“Whenever people are behaving in complex systems to produce a unified result, behavioral strategy is relevant. ... When you don’t truly understand why people do what they do, you can make decisions expecting one thing and you get another.� of President Joe Crowley caused me to re-think my career path. I had already been successfully consulting so the change seemed logical. Moreover, since leaving my full-time job I’ve taught courses at UNR through the College of Business Administration, the Department of Psychology, and also through the Department of Continuing Education. So, I don’t perceive that I’ve left academia, I’ve merely changed my relationship with it to be more in control. MQ readers might be interested in knowing that I’ve most recently been in discussions with the Mackay School of Earth Sciences and Engineering about developing and teaching a safety leadership course that I hope will be offered as part of their regular curriculum for the future mine operators of the world, and that could also be attended by those currently working at the Nevada mines. The goal of the course would be to improve understanding of human behavior and to provide knowledge of how to better apply that knowledge to improve mining safety. Stay tuned.

safety in the mining industry? Boyce: Whenever people are behaving in complex systems to produce a unified result, behavioral strategy is relevant. People bring with them a history that will impact how they respond to certain aspects of that system, including rules, regulations, procedures, a leader’s style, pressure both real and perceived. Thus, it’s hard to get everyone to be always working in concert. Moreover, when you don’t truly understand why people do what they do, you can make decisions expecting one thing and you get another. For example, as I believe I stated in a previous column, when we reward the absence of injuries, we are just as likely to get the non-reporting of those injuries — when certain factors are also present — as we are to get safer behavior. I can help a company to better understand this and test their system to see if they are vulnerable to such unwanted outcomes or side-effects of wellintended processes. Put a different way, as a behavioral strategist, I help the companies that I work with to get the best effect from the things they do to influence behavior and at the lowest cost. Mining companies are amongst the most complex systems in which a person can work, given its history, how it’s regulated, and the complexity of the processes to get the ore to an end-product that has value to the consumer. So, mining is the perfect candidate for what I do. MQ: How has safety in the mining industry changed over the years? See BOYCE, 90

MQ: What does behavioral strategy have to do with

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Boyce ... my last column for MQ.

Continued from page 89 Boyce: Well, I’m pleased to say that among the operators I’ve had the pleasure to work with, safety is evolving from a top-down, compliance-driven punitive approach to one that is more collaborative and positive. Managers have come to realize that those doing the work often know best how to approach it from both a safety and production stand-point. So, employees’ voices are heard and respected. More importantly their input is used. Unfortunately, this is in stark contrast to how the industry is being regulated since the high-visibility fatalities that have occurred in coal. MSHA is tightening the reigns and focusing more on regulation and punitive approaches. Unfortunately, every bit of training that I have as a behavioral strategist suggests that enforcement has produced its maximum effect in mining safety. So, an industry-wide improvement in safety will only come about by means of more operators adopting the collaborative and positive approach to safety I discussed earlier. Unfortunately, some have become so busy dealing with the changes that MSHA is throwing at them that they are not emphasizing these positive approaches enough. I fear we may see safety trend in the wrong direction if this doesn’t change.

MQ: What do you think is the most important thing to remember about safety? Boyce: A perspective that it could happen to me. And,

“Unfortunately, every bit of training that I have as a behavioral strategist suggests that enforcement has produced its maximum effect in mining safety. So, an industry-wide improvement in safety will only come about by means of more operators adopting the collaborative and positive approach to safety.� just because it hasn’t yet doesn’t necessarily mean that you are using all of the safety precautions available to you. No injury is worth the convenience and time-savings that we believe we get. You see, humans are not good about delaying gratification, so they are motivated by immediate and certain convenience over preventing a relatively lower probability of an injury. They play the odds. And, when they get the convenience without getting hurt, they learn from that experience that it’s OK to complete the job that way. Well, sometimes it’s not. And that’s when the injury occurs. What’s worse is when supervision and management are focusing too much on outcomes and not on how they were achieved, unintentionally rewarding at-risk behavior with their praise for the amount of work accomplished. I wrote a bit about this in

MQ: Other than safety, what else can behavioral strategy help? Boyce: With just about everything where human performance is involved, including production, environmental compliance, quality, and the safety work for which we’ve become known, and as safety improves we typically see improvements in these other areas even without a direct focus on them. The success I’ve had helping some of the major mine operators throughout the U.S. has allowed me to apply these same behavioral principles to develop supervisory skills and improve leadership more generally. And, an important part of this work is communicating more effectively. So, behavioral strategy can also help to improve communication and leadership skills. This has become such a popular topic for me that I’m summarizing my approach to both in a brief executive book on leadership that should be available this fall. MQ: Thank you, Dr. Boyce, for taking the time to speak with me. Boyce: It was my pleasure. Thank you for having me. ——————— Learn more at www.cbsafety.com or contact Dr. Boyce directly at ted.boyce@cbsafety.com.

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Climax makes portable repair work possible By MARIANNE KOBAK McKOWN Mining Quarterly Editor

Peter Wood, market segment leader for Climax Portable Machining & Welding Systems, describes on-site machining equipment during the 2013 Mine Expo in June at the Elko Convention Center.

ELKO — When many businesses need equipment fixed, they send it to a repair shop, but in the mining industry, shipping large items for service could slow production. Climax Portable Machining & Welding Systems, based in Newberg, Ore., has another solution. Climax was founded in 1966 and is a worldwide leader in portable machining and welding systems, according to the company. Some of the company’s major clients include General Electric, Siemens, Bechtel, Caterpillar and Newport News Shipbuilding. Climax has done work on the Hoover Dam wicket gate bearing repair, Golden Gate Bridge seismic upgrade, and General Dynamics electric

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Climax ... Continued from page 91 boat repair for U.S. Navy submarines, according to the company. Climax’s product line features more than 40 on-site machine tools. “We supply portable machining and welding equipment at the job site,” said Peter Wood, market segment leader for Climax. Wood said the repair machines the company provides can be mounted onto equipment at the job site. Climax sells its machines and welding systems, but also rents them to mines and mine service businesses. Renting the machines gives mines or

repair service businesses an opportunity to try the equipment, see what they like, see if it’s affordable or if there is enough work to buy the systems, Wood said. “We don’t provide the service (of repairing items) because we don’t want to compete with our customers,” Wood said. “Since it is portable, it can be configured how they need it — vertical or horizontal.” If a mine needs something repaired, it would have to pay someone to pull it apart, transport it, repair it, transport it back and then reinstall it. The Climax machines allow all of the maintenance to be done on site. “This equipment makes repair work less expensive and more efficient,” Wood said.

Beware of mining magazine scam Climax’s highest selling component is one of its auto borewelder, he said. “Once you set up the boring bar, you don’t have to set it up again to weld,” Wood said. The Climax machines are able to hit factory specifications, he said. “The main thing is to take this into the field,” Wood said. “Customers like how fast it can remove metal. They can do a job in four hours instead of eight. It has a lot of versatility.” The company has locations in New Hampshire and Germany and does business all over the globe. Wood said the machines have different power options including electric and hydraulic servo motors. The repair equipment is known for being rugged and versatile, he said. “They’re modular enough they can help customers with what they want and need,” he said. “Any time you have something that needs to be repaired, we’re kind of the ambulance.” Wood said the company is trying to expand into different welding opportunities, but it also does business in the oil, gas and shipping industries. For information on Climax contact the company at 1-503-538-2185 or climaxportable.com.

ELKO — The Elko Daily Free Press and Mining Quarterly staff want businesses to be aware of a possible advertising scam. Several of our Mining Quarterly customers were called by someone claiming to be from “the mining magazine” and said their ad in the next issue needed to be prepaid. The caller also asked for a credit card number. If you receive this call, it is not from the Free Press or the Mining Quarterly. At least one of these scammers claimed to be Marianne McKown. The editor of the Mining Quarterly, Marianne Kobak McKown, does not sell advertising for the magazine, nor does she ask for or take payments. One of our customers also said the caller ID was from a 309 area code, which is in Bloomington, Ind. Our staff found there is a website for Mining Magazine, but it is out of London, England, and makes no mention of an office in the United States. The advertising staff at the Free Press and the Mining Quarterly do not outsource advertising payments or collections. Our advertising staff has contacted customers about this potential scam. When one of our staff contacts a business to run an advertisement in the Mining Quarterly, we will always contact the company from the local 775 area code or by email with the elkodaily.com domain name. If you have any questions, please contact Free Press Advertising Director Nancy Streets at 748-2704.

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Barrick Gold Corp.’s Cortez Hills miner Gabriel Garcia praises the underground’s safety culture in this still from the DVD.

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ELKO — To help children understand how the mining process works, Barrick Gold Corp.’s Cortez Hills mine produced “The Adventures of Rocky and Clod” this year. The 13-minute DVD documents the extraction of two animated limestone ore deposits, named Rocky and Clod. The movie follows Rocky, who lived on the earth’s surface, and Clod, who lived thousands of feet underground, as they are processed for gold. Will Shumway, lead underground ore control geologist for the Cortez Hills Underground mine, hosts the DVD as he describes Rocky and Clod’s journey from being clumps of rock to material used in a space shuttle and other technologies. “It was a pretty unique opportunity,” Shumway said. “The movie was originally designed so that we could give it to the Cortez families to show what their parents did ... Any kid in town can watch that (DVD) and say, ‘That’s what my dad or mom does.’” The DVD took about a month to complete, he said. “I’m not a great actor, so it took a long time to get those 13 minutes,” Shumway laughed.

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Continued from page 93 The informative DVD was created by Freelance Productions, based out of Whitehall, Mont. “(Rocky and Clod) was a challenge, because you had to make it entertaining for kids,” said Freelance Producer and Owner Ken Eurick. “There’s a fine line between what’s fun and what’s too silly.” Eurick said he’s produced movies for several other mining companies, including Newmont Mining Corp. and Goldcorp. The DVDs were given to the employees at the mine’s annual refresher course, Shumway said. “It wasn’t until we sat down and watched the movie (collectively) that we thought everyone might like to see this,” he said. “The Adventures of Rocky and Clod” was then presented to classes in the Carlin and Crescent Valley elementary schools, before more than 300 students, according to Cortez Underground Geologist Andy Baldus. Baldus played the DVD for the students and answered questions when the movie ended. “They pretty much all seemed to enjoy it and they asked a lot of good questions,” he said. “Judging from the questions they had, I would say it sparked their interest (in the mining industry). ... Some of the kids even asked if we knew Rocky and Clod personally. “I’d like to present the movie to other schools as well. I really like talking to kids about geology and the mining industry.” Safety first Inspiration for Rocky and Clod derived from a Cortez DVD produced last year, said Vern Goglio, acting general manager for the Cortez operation. “I first put the Safety Culture DVD together mainly for our employees to take home,” Goglio said. “Most people have a poor perception of mining ... and we wanted to (assure) families their loved ones were in a safe environment. We wanted them to know Cortez really cares about their husbands, their wives.” The 20-minute “Cortez Underground Safety Culture” DVD, also created by Freelance Productions, consists of candid interviews with the mine’s employees. Baldus was given free rein to talk with any miners without the presence of their supervisors, Goglio said. “I went underground and hung out with the boys and girls and filmed their honest See DVDS, 96

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DVDs ... Above: Underground geologist Will Shumway describes how “Clod” is removed from under the earth to reunite with his friend Rocky in this still from Cortez’s “The Adventures of Rocky and Clod” DVD. At left: Cortez employee Tammy Adams, who appears in the safety culture DVD, operates a large piece of mining equipment.

Continued from page 95 statements about the mine’s safety rather than having them blurt out just the corporate stuff,” Baldus said. Every employee in the video testifies to Cortez’s record of safety and the camaraderie within the workforce — often described as a family. “Compared to the jobs I’ve had before, this is paradise,” miner Gabriel Garcia said with a big smile in the video, while standing inside Cortez’s underground mine. The DVD has helped Cortez families find peace of mind, Goglio said. “My 28-year-old daughter said the DVD was great and she feels better about her husband going to work at the mine,” he said. “I think it’s comforted others, too. ... The unknown’s not so much unknown anymore.”

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Take to the sky Newmont employee a pilot for 23 years By MARIANNE KOBAK McKOWN Mining Quarterly Editor

Marianne Kobak McKown/Mining Quarterly

Mike Creek flies his Bearhawk in July over the Boyd Ranch. Top: A view of the Ruby Mountains from Creek’s plane.

98 MINING QUARTERLY, Elko, Nevada FALL 2013

ELKO — The small plane moved into position at the end of the runway. Its engine began to grow in power and before I realized it, we were off the ground. I have flown in many commercial planes, but I don’t think anything beats the experience of flying in the front seat of a single engine tail-dragger. As the pilot, Mike Creek, flew higher into the sky, I could see the morning sun making the roofs of Elko glisten. Creek turned his plane, and we headed toward the Ruby Mountains. Lamoille Canyon is beautiful from the ground, but I think the bird’s eye view I had made it even more gorgeous. In a commercial plane, the view is very limited, but in a small aircraft, passengers can see more than 180 degrees around the plane. The flight itself, was peaceful, but when we hit a little turbulence, it reminded me of being on a roller coaster — fun and exciting at the same time. Creek is the environmental manager for Nevada closure and reclamation for Newmont Mining Corp. and has been in the mining industry for 30 years. However, his real passion is flying and he has been a pilot for 23 years.


“I was about 8 years old and my father arranged to take me on a flight in a Cessna, that’s what got me hooked,” Creek said. He started flying in 1990 in Butte, Mont. “I get to go to a lot of different places,” Creek said. He has a hanger at the Elko Regional Airport, but many of the places he goes to don’t have a paved runway. “Really what drives me, for a lot of my flying, is being able to access back country,” he said. He lands at lots of maintained airstrips, but those aren’t always necessary. His plane is fitted with bush tires so it can land as long as there is a large enough area with flat ground. Although, he likes to walk possible landing areas before flying to them. Creek’s plane is an amateur-built experimental Bearhawk. It is a single-engine, four-place, high-wing, tail-dragger that he built himself. Four-place, means it can seat four people, but he can configure at the plane for two people and elkodaily.com cargo. “The advantage with an experimental is I get to build it myself,” he said. “I’m also the manufacturer and responsible for the maintenance, so I have my mechanic on every flight.” The Bearhawk has a 540-cubic-inch displacement, 250 horsepower engine, so it is capable of short take offs and landings. His plane only needs 300 feet to take off or land. Creek said 20 percent of the planes in the single-engine fleet are amateur built. The other advantage of building a plane, is the cost and choice of what type of systems it has, Creek said. His Bearhawk has a stick to control it, but it also has GPS navigation and an electronic flight information system. “All the old round gauges are contained in a digital display,” he said. “All the controls are interlinked. A pilot, if he chooses to go the digital route, can have a tremendous amount of information available to him — more than we did before. It’s like having a flight engineer in flight. It’s more contained; if I had the same amount of information on round gauges, the panel would have to be larger and heavier.” Creek said his Bearhawk is more affordable and more convenient than a Cessna. He said most private pilots fly older planes because they are less expensive to purchase. “This is in the range of older planes for cost, but has the equipment advantage of a newer plane,” Creek said about his Bearhawk. “It’s very difficult to do

Video

Ross Andreson/Mining Quarterly

Above: Newmont Mining Corp.’s Mike Creek talks about the GPS unit of his Bearhawk that he built and flies. Below: Newmont Mining Corp.’s Matt Murray, left, helps co-worker Mike Creek move the Bearhawk experimental aircraft into a hangar.

See PILOT, 101

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 99


Above left: Mike Creek flies his Bearhawk over the southside of Elko. Above right: The view from the cockpit of Mike Creek’s Bearhawk. A slight rainstorm is over the Boyd Ranch. At left: Andy Boyd stands near Mike Creek’s Bearhawk, which just landed on the Boyd Ranch. Opposite page: Mike Creek flies his Bearhawk near the Boyd Ranch. Marianne Kobak McKown Mining Quarterly

100 MINING QUARTERLY, Elko, Nevada FALL 2013


Pilot ... Continued from page 99 upgrades on the older planes. It’s quite onerous and time consuming. It’s more efficient to have digital.” When asked how long it took him to finish the plane, Creek smiled and said he started building it in 2005. “I’m always changing and reconfiguring it, so it’s never finished,” he said. Creek said he had “very good” support from family and help from friends, when he was building the plane. When he took me for a flight, we landed at the Boyd Ranch, owned by Andy Boyd and his family. We landed in the pasture and when we touched down, it was gentler than I expected. I have been jolted more landing on a paved runway. Boyd, like Creek, is a pilot. Boyd keeps his plane on the ranch. The two men said a lot of the private pilots in the area get to know each other and share tips. When we were ready to leave, I expected the take off from the pasture to be jarring, but it was almost at smooth as when we left the airport. Once again, it took Creek only a few seconds to get the Bearhawk into the air.

While flying over open country, Creek didn’t talk much on the radio. However, once we were closer to the airport he let any other planes in the area know we were there. “In Elko, we generally warn other air-

craft at 10 to 20 miles,” he said. “Like anything involving humans, it works most of the time. The pilots out here are very much about safety.” Taking a flight with Creek may have given me the same experience he had as

an 8-year-old. Who knows, maybe this flight has inspired me to someday earn my pilot’s license.

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Pete Bajo: No end in site By MARIANNE KOBAK McKOWN Mining Quarterly Editor

Ross Andreson/Mining Quarterly

CARLIN — No end has been found yet in Newmont Mining Corp.’s Pete Bajo Underground. The Pete Bajo deposit started producing in January 2011, said the mine’s General Foreman Robert “Bob” James. The underground is accessed by portal at the bottom of the Pete Pit in Newmont’s Carlin area. The pit is about 500 feet deep and Pete Bajo is 350 feet deep from the portal, said Ben Larson, underground engineer. The Pete Bajo has “a little bit left,” James said. “There are two stopes left at Pete Bajo,” James said. However, when the Pete Bajo Deposit is done, the Pete Bajo Underground will continue. A new body of ore was found last year called the Fence Deposit. It is 500 feet further down and laterally about 1,000 feet to the north of the Pete Bajo Deposit and began producing in May, James said. Fence is an extension of Pete Bajo, he said. “It’s 1,000 feet wide and about 3,000 feet in length, and the top of it is 1,350 feet down from the surface,” James said. The ore grade averages 0.2 ounces per ton, Larson said. “It’s got high grade in it but it is middle of the road,” he said. The ore is from the Robert’s Mountain formation, Larson said. The rock is a type of limestone and the black colored rock is organic carbon, which holds the gold.

General Foreman Bob James talks about the Fence project in Newmont Mining Corp.’s Pete Bajo Underground Mine.

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Underground Mine Engineer, Ben Larson talks about the Fence project in Newmont’s Pete Bajo Underground. “We haven’t found the end of it in a few areas,” Larson said. “The life of mine is 2018. “It makes it difficult to produce out of something you don’t know how big it is yet.” The mine has multiple drifts, which is where the mining or exploration drilling takes place. The 5130 drift is where the Pete Bajo Deposit ends and the Fence Decline begins, James said. The decline leads to the Fence ore body. “We have five core rigs drilling underground to try to find the end,” James said. “Timberline is contracted to explore.” When the contractors explore the ore body, they drill holes up to 2,000 feet deep. “At one station they could be drilling 50 to 100 holes,” James said. “Where ore is, we try to keep 70-foot spacing (at the bottom of each hole) for the ore body.” “They drill with a thick drill soap that acts as a lubricant,” he said. “They bring the core up through the barrel.” Besides lubrication, the drill’s hydraulics must stay cool, this is accomplished by

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Bob James, left, describes the feature of the underground Fence area in Newmont’s Pete Bajo Underground Mine. At right is Ben Larson, an underground engineer. Opposite page top: Bolter operator Matt Hanez manages the controls with the help of digital readout gauges in the underground. Opposite page bottom left: A modified Caterpillar blade with a shorter cab works in the underground mine. Opposite page bottom right: The ground to the left of the bolter shows the mining area and to the right is backfill.

Pete Bajo ... Continued from page 103 water. A machine, nicknamed a water cooler, keeps recycling the water used on the equipment, it makes the work more efficient and saves on water, James said. Water at Pete Bajo is gravity fed into the mine, which means it doesn’t need pumps to move the water. “We have to put water regulators on —the deeper into the mine we go — because the pressure becomes too high,” he said. The southeast station is drilling about 500 feet down, he said. This drift is at about 5,000-foot elevation and about 500 feet down from the portal. The drift will extend another 600 feet linear because the miners haven’t found the end of the ore yet, James said. “We have really good geologists here figuring out where the ore is,” Larson said. Once ore is found, mining can begin “It’s overhead cut and fill, most of what we’re doing at Pete Bajo,” James said. “We put in backfill and cut back over the top of it, so the backfill is always beneath you. There is as much backfill underground as ore we took out.” The mine generates 1,000 to 2,000 tons a day of cement rockfill, which is cement mixed with fly ash, water and aggregate, James said. The fly ash comes from Newmont’s TS Power Plant. The cement and fly ash is mixed with aggregate, and then taken underground. It takes about two minutes to load 20 tons of backfill into a truck, James said. “The ground isn’t the best so it’s bolted, and we shotcreted everything,” he said. “It’s the most incompetent ground or rock on a Newmont property.” “We line drill and split-shoot 90 percent of our headings,” Larson said. “It takes two shots. We shoot 6 feet above and it could take out 15 feet,” Larson said Pete Bajo crews “shoot real light compared to other mines because the ground is very fractured. It’s like sugar cubes.”

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Newmont reports $2 billion loss ELKO — Newmont Mining Corp. reported a $2 billion loss July 26 attributed to lower production, higher costs and a slump in gold prices. Newmont reported its second quarter revenues at $2 billion and cash flow from continuing operations of $293 million, or $0.59 per basic share. A non-cash impairment charge, primarily related to the impact of lower gold and copper prices on longterm assets at two Australian mines, Boddington and Tanami, as well as stockpiles and ore on leach pads, resulted in a net loss attributable to stockholders of $2 billion, or $4.06 per basic share. “I am pleased with our progress to improve our costs and operating efficiencies across our portfolio, which has resulted in a $362 million reduction in year-to-date spending compared to the first half of 2012,” said Newmont President and Chief Executive Officer Gary Goldberg. “We are also on track to reduce our corporate work force by more than one-third, with similar efforts underway at our regional offices. At our operations, we performed in line with our plans. Excluding non-cash asset write-downs, we remain on track with our original outlook for gold and copper production, costs applicable to sales and allin sustaining costs.”

Second Quarter Financial Highlights • Revenues of $2.0 billion; • Attributable gold and copper production of 1.167 million ounces and 34 million pounds, down 1 percent and 11 percent, respectively, from the prior year quarter; attributable gold and copper sales of 1.213 million ounces and 37 million pounds, up 6 percent and 23 percent, respectively, from the prior year quarter; • Consolidated spending down $362 million year-to-date compared to the first half of 2012; • All-in sustaining costs of $1,136 per ounce, excluding stockpile write-downs or $1,548 per ounce, reflecting stockpile write-downs; • Gold and copper costs applicable to sales of $724 per ounce and $2.53 per pound, excluding stockpile write-downs, or $885 per ounce and $8.53 per pound reflecting stockpile write-downs; • Average realized gold and copper prices of $1,386 per ounce and $2.66 per pound, respectively; • Cash flow from continuing operations of $293 million or $732 million year-todate; • Dividends paid of $174 million; • Maintaining full year 2013 attributable gold and copper production outlook of 4.8 – 5.1 million ounces and 150 – 170 million pounds, respectively; • Maintaining annual gold costs applicable to sales outlook of $675 to $750 per ounce, excluding stockpile write-downs, or adjusted to $750 to $825 per ounce, including stockpile write-downs; and • As previously announced, Newmont’s board of directors approved a third quarter gold price-linked dividend of $0.25 per share based upon the average London P.M. Gold Fix for the second quarter.

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As a result of lower gold and copper prices, second quarter net income was adjusted by $1.8 billion, net of taxes and minority interest, for impairments and revaluation. Of that amount, $272 million, net of tax and minority interest, is related to impairments of stockpiles and ore on leach pads. The remaining $1.5 billion, net of tax, is related to


impairments of property, plant and mine development and other long-term assets at Boddington and Tanami in Australia. These charges do not impact the company’s cash flow and are considered one-time charges. Nevada Operations Attributable gold production in Nevada was 383,000 ounces, an increase of 1 percent from the prior year quarter due to new production from Emigrant as well as higher grade and throughput at Phoenix essentially offset by lower tons and grade at Midas, lower grade and recovery at Mill 5, and lower grade at Mill 6. Costs applicable to sale was $691 per ounce during the second quarter, a decrease of 4 percent due to higher ounces sold. All-in sustaining costs at Nevada were $975 for the quarter. The company continues to expect 2013 attributable gold production of between 1.7 million and 1.8 million ounces at costs applicable to sale of $600 to $650 per ounce. South America Operations Attributable gold production at Yanacocha in Peru was 150,000 ounces at CAS of $662 per ounce during the second quarter. Gold production decreased 25 percent from the prior year quarter due to lower mill and leach production associated with the completion of mining at El Tapado in July of 2012. CAS per ounce increased 42percent due to a leach pad write-down of $163 per ounce as a result of lower gold prices and lower silver by-product credits. All-in sustaining costs were $966 per ounce for the second quarter. Excluding the impact of the stockpile write-downs, all-in sustaining costs were $803 per ounce for the quarter. The company continues to expect 2013 attributable gold production of between 475,000 and 525,000 ounces. The company now expects CAS of $650 to $700 per ounce including stockpile write-downs. Excluding these writedowns, the company continues to expect CAS of $600 to $650 per ounce. Attributable gold production during the second quarter at La Zanja in Peru was 17,000 ounces. The company continues to expect 2013 attributable gold production of between 40,000 and 50,000 ounces.

Newmont reduces staff in Colorado ELKO — Newmont Mining Corp. has yet to reduce staff in Nevada as of Aug. 21, after eliminating a third of its workforce in Colorado in June. The company announced June 12 that it was reducing its workforce in Colorado by 33 percent over the next 90 days. According to Newmont, the new model “will shift greater accountability for production and profitability to its operational teams and focus its corporate team on strategy and governance.” “Ongoing price volatility and steadily rising costs create intense pressure for Newmont to continuously improve its efficiency and effectiveness,” Newmont President and Chief Executive Officer Gary Goldberg said in June. “We face some very difficult decisions in streamlining our organization and are committed to treating people fairly throughout this process. Ultimately, we cannot postpone the work we need to accomplish now to create sustainable value for our stakeholders into the future.” Newmont spokesman Omar Jabara said that “reductions could apply companywide,” the Reno Gazette-Journal reported. “Regarding our mine sites in Nevada, the operating model work is not yet complete, so we don’t know the specific job implications as of yet, but we anticipate there being some staff reductions at select sites in our various regions across the globe,” Jabara said in an email, the Reno Gazette-Journal reported. “We have not yet completed our operating model work, so we don’t have specific numbers at this time,” he said. “Rising costs across the industry and continued volatility in metal prices only reinforces the need to run our operations as safely and efficiently as possible to ensure success in any commodity cycle.”

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Guatemala human rights official protests mining Virginia City, Gold Hill residents against revival of Comstock join demonstration

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RENO (AP) — Mining critics from Guatemala joined opponents of the revival of open pit mining of northern Nevada’s historic Comstock in a protest highlighting shared concerns on the impacts on their communities a hemisphere apart. Alvaro Sandoval Palencia of the Guatemala Human Rights Commission was among the more than a dozen protesters who picketed at the end of June in Reno outside a meeting of shareholders of Comstock Mining Inc. at the Nevada Museum of Art. Leaders of the Comstock Residents Association who organized the protest said “They have moved into the they invited Palencia to join them because he’s trying to halt mining by the Reno- Comstock and are removing the based KCA, an associate of Comstock Mining, near his hometown of La Puya, precious landscape in the Guatemala. “I never intended to become an environ- National Historic Landmark, mental activist,” Palencia said Thursday. truck load by truck load.” “But in 2011, my life changed dramatically — Joe McCarthy when I discovered a trans-national mining Comstock Residents Association company was digging an open-pit mine spokesman near my home without notifying or consulting my community.” Comstock Residents Association spokesman Joe McCarthy said La Puya has become a “sister community” in the fight to stop mining in the National Historic Landmark at Virginia City and Gold Hill, southeast of Reno. “We have suffered similar experiences with these two companies, both based in Nevada. Both just barged right into our communities, then asked for forgiveness, not permission, to conduct surface mining in close proximity to our homes,” he said. “They show no regard for the people and are focused on profit at our expense and our governments have allowed this to happen.” “They have moved into the Comstock and are removing the precious landscape in the National Historic Landmark, truck load by truck load,” he told the Reno GazetteJournal. Bob Fulkerson, executive director of the Progressive Leadership Alliance of Nevada, said the mining operations on the Comstock and in Guatemala are different than many because they are close to local residents. “It’s one thing to do it in the middle of nowhere,” he said. “When you do it in residential areas, the impacts are unconscionable.” Beginning in 2003, Comstock Mining quietly worked to acquire property and mining claims on 6,000 acres across the Comstock in what the company describes as an “unprecedented consolidation” of mineral resources. Mining activity started in Storey County last year, but the company plans to mine in neighboring Lyon County, as well. Corrado De Gasperis, president and CEO of Comstock Mining, told shareholders at Thursday’s meeting that mining operations are proceeding smoothly and that the future holds immense financial promise. “We feel in so many ways we’re just getting started,” De Gasperis said. Since mining started at an open pit mine last August, the company has ratcheted up activity to the


point it is now pouring 400 ounces of gold and silver weekly to meet a desired production goal of 20,000 ounces annually. “We’ve been ramping up at an incredible rate and we’re feeling real good about that,” he said. Previously, De Gasperis has said the mining activities could provide an economic shot in the arm to the two counties for decades. He has said that one of the company’s long-term plans is to restore historic mining structures in the Comstock now crumbling due to neglect. He maintains concerns about the potential for new operations to unearth mercury contamination from historic mining are overblown. He has said results of $2 million worth of testing conducted by the company and submitted to the Nevada Division of Environmental Protection indicate no such danger.

Ryan Elston, 8, joins others protesting mining in the Comstock area at the end of June in Reno, outside the Nevada Museum of Art where the annual shareholders meeting was being held. AP Photo/The Reno Gazette-Journal, Marilyn Newton

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AP Photo/U.S. Department of Agriculture, Peggy Greb

This undated photo shows rare-earth oxides, clockwise from top center: praseodymium, cerium, lanthanum, neodymium, samarium, and gadolinium.

Gold rush-era discards could fuel cellphones, TVs By TRACIE CONE Associated Press

SACRAMENTO, Calif. — Across the West, early miners digging for gold, silver and copper had no idea one day something else very valuable would be buried in the piles of dirt and rocks they tossed aside. There’s a rush in the U.S. to find key components of cellphones, televisions, weapons systems, wind turbines, MRI machines and the regenerative brakes in hybrid cars, and old mine tailings piles just might be the answer. They may contain a group of versatile minerals the periodic table called rare earth elements. “Uncle Sam could be sitting on a gold mine,” said Larry Meinert, director of the mineral resource program for the U.S. Geological Survey in Reston, Va. The USGS and Department of Energy are on a nationwide scramble for deposits of the elements that make magnets lighter, bring balanced hues to fluorescent lighting and color to the touch screens of smartphones in order to break the Chinese stranglehold on those supplies. They were surprised to find that the critical elements could be in plain sight in piles of rubble otherwise considered eyesores and toxic waste. One era’s junk could turn out to be this era’s treasure. “Those were almost never analyzed for anything other than what they were mining for,” Meinert said. “If they turn out to be valuable that is a win-win on several fronts — getting us off our dependence on China and having a resource we didn’t know about.”

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The 15 rare earth elements were discovered long after the gold rush began to wane, but demand for them only took off over the past 10 years as electronics became smaller and more sophisticated. They begin with number 57 Lanthanum and end with 71 Lutetium, a group of metallic chemical elements that are not rare as much as they are just difficult to mine because they occur in tiny amounts and are often stuck to each other. Unlike metals higher up on the table such as silver and gold, there’s no good agent for dissolving elements so closely linked in atomic structure without destroying the target. It makes mining for them tedious and expensive. “The reason they haven’t been explored for in the U.S. was because as long as China was prepared to export enough rare earths to fill the demand, everything was fine — like with the oil cartels. When China began to use them as a political tool, people began to see the vulnerability to the U.S. economy to having one source of rare earth elements,” said Ian Ridley, director of the USGS Central Mineral and Environmental Resources Science Center in Colorado. Two years ago, China raised prices — AP Photo/U.S. Geological Survey

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This 1905 photo shows tailings from hydraulic mines on Spring Creek in Nevada County, Calif.

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This undated photo shows a rock sample being analyzed in a Denver laboratory consisting of quartz, fine grain (microscopic) pyrite, galena and sphalerite. The USGS Mineral Resources program is looking at samples from previously mined ore that may contain critical minerals including rare earth elements.

Ames Laboratory, materials scientist Ryan Ott, left, and research technician Ross Anderson examine an ingot of magnesium and rare-earth metals as part of a project to optimize the process to reclaim rare earths from scraps of rare-earth-containing magnets in December 2012 in Ames, Iowa. AP Photo/ U.S. Department of Energy Ames Laboratory

Tailings ... Continued from page 111 in the case of Neodymium, used to make Prius electric motors stronger and lighter, from $15 a kilogram in 2009 to $500 in 2011, while Dysprosium oxide used in lasers and halide lamps went from $114 a kilogram in 2010 to $2,830 in 2011. It’s also about the time China cut off supplies to Japan, maker of the Prius, in a dispute over international fishing territory. That’s when the U.S. government went into emergency mode and sent geologists to hunt for new domestic sources. “What we have is a clash of supply and demand. It’s a global problem. A growing middle class around the world means more and more people want things like cellphones,” said Alex King, director of the Critical Materials Institute of the Department of Energy’s Ames Research Lab in Iowa. “Our job is to solve the problem any way we can.” At the University of Nevada-Reno and the Colorado School of Mines, USGS scientists used lasers to examine extensive samples of rocks and ore collected across the West during the gold rush days by geologists from Stanford University and Cal Tech. “If we could recycle some of this waste and get some-

112 MINING QUARTERLY, Elko, Nevada FALL 2013

thing out of it that was waste years ago that isn’t waste today, that certainly is a goal,” said Alan Koenig, the USGS scientist in charge of the tailings project. One sample collected in 1870 from an area near Sparks, Nev., where miners had searched for a viable copper vein, has shown promise and has given researchers clues in the search for more. They have found some rare earths exist with minerals they had not previously known occur together. “The copper mine never went into production, but now after all of this time we’ve analyzed it and it came back high with Indium, which is used in photovoltaic panels. It never economically produced copper, but it gives us insight into some associations we didn’t previously recognize,” Koenig said. Indium also has been found in the defunct copper mine that dominates the artsy southern Arizona town of Bisbee. Koenig and his colleagues are working to understand the composition of all of the nation’s major deposits sampled over the past 150 years. In some cases, the mines were depleted of gold or copper, but the rocks left piled alongside mines and pits could hold a modern mother lode. “We’re revisiting history,” he said.

They are compiling data from 2,500 samples to better understand whether it’s possible to predict where rare earths might be hiding based on the presence of other elements there, too. “If I had to venture a number, I’d say we have found several dozen new locations that are elevated in one or more critical metals,” Koenig said. “With this project the goal would be to have this large data base available that would allow us to predict and to form new associations.” Currently there is only one U.S. mine producing rare earths— at Mountain Pass in the Southern California desert. Molycorp Inc.’s goal in reopening the defunct mine is 20,000 metric tons of rare earth elements by this summer, including cerium oxide used to polish telescope lenses and other glass. The USGS is counting on companies like Molycorp to use the information they’ve gleaned to uncover other easy-to-reach deposits sitting on federal land and elsewhere. “Without rare earths we’d be back to having blackand-white cellphones again,” said the USGS’s Ridley.


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Marianne Kobak McKown/Mining Quarterly

Turquoise Ridge Joint Ventur Projects General Supervisor Trampus Cook, left, and Mine Superintendent Jon Laird recently attended a series of leadership courses sponsored by Barrick Gold of North America at University of Nevada, Reno

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ELKO — Education is important, and last year Barrick Gold Corp. took that importance a step further by sending some of its site leaders back to school. Turquoise Ridge Joint Venture General Manger Nigel Bain helped organize a leadership class, funded by Barrick and taught by University of Nevada, Reno professors. “We got a ton of people who for one reason or another jumped into the industry and for one reason or another these guys boiled to the top of the talent pool for Barrick,” Bain said. “We put a lot of effort into training people, but we really don’t educate them. It’s pretty tough to get an education.” Bain said supervisors are often sent to training in Toronto, but management realized there was a quality source of education in Nevada — UNR. Jim McClenahan, director of management and executive programs for UNR’s Extended Studies, worked for six or seven months with Barrick’s management team to conduct a needs assessment and design a class similar to what is offered to full-time students at a business or mining school. He enlisted the help of the University’s College of Business, including Dean Greg Mosier and other faculty members, to help develop the curriculum and teach the courses, stated Barrick. The course ran from October to March. It consisted of 12 all-day sessions and outside course work. The employees who particiSee SCHOOL, 116

114 MINING QUARTERLY, Elko, Nevada FALL 2013


Barrick interns gain professional experience By LESLIE MAPLE Communications Specialist Barrick Gold of North America

ELKO — Barrick offers summer internships in more than 19 different disciplines but students interning with the company get more than just a summer job. Students have the opportunity to learn from industry experts who take time to mentor them and make sure they get the most out of the experience. “It’s great to have the opportunity to work in such a positive environment, for a company that is as interested in developing their workforce as they are in developing their business ventures,” said Nick Pontiflex, who interned in Industrial Hygiene at the Bald Mountain mine. Students began their internships in early June, several returning for their third or fourth year, and completed them in late August. Senior and graduate students were required to present their work to Submitted/Gene Russell Photography

See INTERNS, 116 The 2013 interns pose for a photo before presentations begin Aug. 8 at the Elko Convention Center.

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Submitted/Kyle Jones

Taylor Lenox, environmental engineering intern, presented on the experience she had at the Bald Mountain site.

Ross Andreson/Mining Quarterly

Barrick’s Turquoise Ridge Joint Venture General Manager Nigel Bain listens as Robert Johnson, an ore control geologist, conducts the afternoon production meeting.

Interns ...

School ... Continued from page 114 pated traveled to Reno for the first few sessions, but UNR delivered most of the sessions in Elko, in cooperation with Great Basin College. After creating the class, the general managers at Barrick’s mine sites chose the students. Bain said managers chose people for various reasons, and not everyone who wanted to go could attend because only a 22 spots were available. Bain said the goal of the class was to help the employees understand the business side of mining. “We were teaching basic business management in today’s world where capital is limited,” he said. The students were taught how to present projects and to understand why projects are sometimes turned down. One of the students, Turquoise Ridge Projects General Supervisor Trampus Cook, said he is trying to earn a degree in industrial engineering. He has been in mining for 16 years and with Barrick for almost three years. “I was always a miner and then I became shift boss,” he said. “When I went higher, I got into things that I had no grasp on.” The class changed that for him.

Continued from page 115

“I got a lot out of all of it,” he said. “The instructors were excellent, and had a lot of real world experience.” Another student in the leadership class, Turquoise Ridge Mine Superintendent Jon Laird, said it gave him a fresh perspective. Laird has been in mining for 20 years and had a year of college courses. “For me, (the class) was about having the opportunity to learn more about business,” he said. “Working with other offices, you’re able to steal some good ideas. The financial side of things was probably the most helpful. ... Most of the people were strong on leadership, but needed more of the financial side.” A few of the other helpful lessons included email etiquette, how to conduct an interview with an employee, business writing, presentations at the corporate level, human resources and team building, Cook and Laird said. Laird said one of the most helpful skill was understanding people’s personalities and how they fit in a team. “It helped me understand why people get along or don’t,” he said. Cook agreed. “I work with a team everyday,” he said. “It helped me work with people

116 MINING QUARTERLY, Elko, Nevada FALL 2013

differently. In almost every class, there was at least one thing out of each class where the light bulb went off.” The students also had peer to peer sharing. Bain said mine sites are faced with similar challenges, but they may approach the solution differently. The students could share these solutions with people from other sites through the class. “UNR is a high-ranked business school and this was certainly a cost effective way of growing people’s education,” Bain said. Lou Schack, director of communications and community relations for Barrick Gold, agreed the course was cost effective for the company. Since the course was tailored for miners, the students received a better education than a general business course would have supplied, he said. Bain said he hopes Barrick sponsors the class again in the future. “The next time, we would give more guidance on what we want out of the class,” Bain said. “We dove in on the deep end and figured it out along the way. ... If we don’t educate Nevadans, it doesn’t matter where the gold price is. We’re still looking to the university system for skilled people.”

regional leaders. The final presentations took place Aug. 8, at the Elko County Convention Center. “We look forward to seeing these future graduates making a positive contribution to the growth in the industry and we hope a few are destined for making Barrick’s future bright,” said Gary Halverson, president, Barrick Gold of North America. “These students are our future and their engagement at the start of their career means long term success for Barrick.” Developing workforce talent is important to Barrick. This year more than 100 students participated in the program. Each completing an internship designed to ensure that the student carried real responsibility and completed real work. “I am studying Environmental Engineering at Montana Tech,” Nathan Madison, a senior graduating in December said. “My internship at Barrick really helped my development by giving me insight into an active mining operation. I had plenty of opportunity to see how what I’m studying in class applies in the real world. In addition to developing my skills in environmental engineering, I got a chance to learn about other functions within the mining industry and I learned a great deal about the importance of safety.” Barrick recruits students primarily from six U.S. universities that offer mining-related curricula. While students come from as far away as New York, a significant number hail from the University of Nevada, Reno. “Developing workforce talent is an important part of our future,” said Dana Pray, Regional Recruiting Manager. The internship program provides educational opportunities for students while also giving us the opportunity to evaluate them as potential long-term employees.” For information about Barrick’s internship program, please visit the careers section at www.barrick.com.


Barrick reports $8.56 billion loss ELKO — Despite increased production, Barrick Gold Corp. reported Aug. 1 a $8.56 billion net loss for its second quarter because of impairment charges stemming from declines in metal prices. The total after-tax charge of $8.7 billion is comprised of $5.1 billion for the Pascua-Lama project, $2.3 billion in goodwill impairments and $1.3 billion in other asset impairment charges. The Toronto company’s net loss of $8.56 billion, or $8.55 per share, compared with a profit of $787 million, or $0.79 per share, for the same quarter a year ago. Adjusted net earnings were $663 million, or $0.66 per share, while it totaled $821 million or $0.82 per share in 2012. Revenues slid to $3.201 billion from $3.244 billion in the prior-year quarter. However, the company reported higher production for both gold and copper. Gold production increased to 1.811 million ounces from 1.74 million ounces in the second quarter of 2012. This growth benefited from strong performances at several mines, including Nevada’s Cortez, Veladero in Argentina and Peru’s Lagunas Norte. Realized gold price fell from $1,608 per ounce to $1,411 per ounce. Copper output improved to 134 million attributable pounds from 109 million attributable pounds in the prior

“We have reduced 2013 budgeted capital and costs by about $2.0 billion, which has offset the cash flow impact of the drop in gold and copper prices that has occurred this year.We have reduced all-in sustaining cost guidance by about $100 per ounce this year from levels which are the lowest of our peers. The bulk of our expected 2013 gold production is at all-in sustaining costs well below current spot levels, and for those operations that are not generating positive cash flow, we will change mine plans, suspend, close or divest them.” — Jamie Sokalsky Barrick Gold Corp. President and CEO year. Realized copper price dropped from $3.45 per pound to $3.28 per pound. The company maintained its production guidance of 7.0 to 7.4 million ounces for the year, while cutting its cost guidance for gold and copper. “We are pleased with our second quarter operating performance and our improved 2013 guidance,” said Barrick President and CEO Jamie Sokalsky. “These results reflect the high quality of Barrick’s portfolio of assets and our increasingly effective efforts at controlling costs. We are disappointed with the impairment charges for Pascua-Lama and other assets but are confident that these assets, some with mine lives in excess of

25 years, will generate substantially more economic benefits over time.” Barrick’s strategy will be to reduce costs and focus on strong performing mines. The company has “no plans to build new mines,” stated the second-quarter report. “Its superior group of five key mines — Cortez, Goldstrike, Pueblo Viejo, Veladero and Lagunas Norte — are expected to generate some 60 percent of 2013 production at average all-in sustaining costs (AISC) of $650-$700 per ounce,” the report stated. “An additional seven mines have AISC below $1,000 per ounce, See RESULTS, 118

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 117


Results ... Continued from page 117 bringing the total amount of expected 2013 production with costs below this level to about 75 percent.” Sokalsky said the company will continue to reduce costs, which will allow Barrick to respond quickly to the “new metal price environment.” “We have reduced 2013 budgeted capital and costs by about $2.0 billion, which has offset the cash flow impact of the drop in gold and copper prices that has occurred this year,” he said. “We have reduced all-in sustaining cost guidance by about $100 per ounce this year from levels which are the lowest of our peers. The bulk of our expected 2013 gold production is at all-in sustaining costs well below current spot levels, and for those operations that are not generating positive cash flow, we will change mine plans, suspend, close or divest them.” Developing Plans to Maximize Cash Flow For the remaining operations with expected 2013 AISC above $1,000 per ounce, Barrick stated it will either change mine plans, suspend, close or divest these assets to improve cash flow. Actions currently being considered as part of an ongoing process include: • Bald Mountain (Nevada) - mine plan changes to reduce the number of pits and focus on the most profitable ounces, while retaining the option to access other ore in the future • Round Mountain and Marigold (Nevada) - working with our joint venture partners to optimize mine plans

• Hemlo (Canada) - defer the open pit expansion and optimize the underground mine plan • Porgera (Papua New Guinea) - evaluate mine plan changes and explore other alternatives • Plutonic, Yilgarn South (Australia) - optimize the mine plans and/or divest • African Barrick Gold (ABG) (Tanzania) - finalizing a detailed operational review to aggressively optimize mine plans and improve operations • Pierina (Peru) - assessing closure options North America Regional Business Unit North America produced 0.93 million ounces at AISC of $797 per ounce, ahead of expectations. Barrick’s 60 percent share of production from the Pueblo Viejo mine in the Dominican Republic was 0.12 million ounces at AISC of $635 per ounce. Production at Pueblo Viejo increased from the first quarter of 2013

primarily due to higher tons processed as the mine ramps up to full capacity, expected in the second half of this year. The new 215 megawatt power plant is expected to be commissioned on schedule in the third quarter. Barrick’s share of 2013 production from Pueblo Viejo is anticipated to be 500,000 to 600,000 ounces at AISC of $525 to $575 per ounce. During the quarter, Pueblo Viejo Dominicana Corporation reached an agreement in principle with the government of the Dominican Republic concerning amendments to the Pueblo Viejo special lease agreement (SLA). Discussions to finalize a definitive agreement continue, but to date the parties have not concluded an agreement. The proposed amendments will require the approval of the boards of directors of Barrick and Goldcorp, the project lenders, and the Congress of the Dominican Republic. The SLA will remain in effect according to its present terms unless and until the definitive agreement is executed and approved. The government has reaffirmed its support for this world-class mine. Nevada Operations The Cortez mine delivered a strong performance, producing 420,000 ounces at AISC of $376 per ounce on higher grade oxide ore. Goldstrike produced 190,000 ounces at AISC of $1,226 per ounce, reflecting processing of lower grade ore at the autoclave facility, which is currently undergoing modifications to enable See RESULTS, 120

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FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 119


Barrick eliminates 40 positions in Nevada

Results ... Continued from page 118 about 3.5 million ounces to be brought forward in the mine plan through the thiosulphate project. The project is on track to enter production in the third quarter of 2014 and contribute average annual production of 350,000 to 400,000 ounces over its first full five years of operation. Barrick expects production to increase and AISC to significantly decrease at Goldstrike in the second half of 2013. The company continues to expect full year production to be in the range of 3.55 to 3.70 million ounces and now expects AISC to be in the range of $750 to $800 per ounce, lower than our previous range of $820 to $870 per ounce. “We have sold Barrick Energy and are well advanced in a process to divest certain Australian assets as part of our portfolio optimization strategy,” Sokalsky said. “We are progressing the Pascua-Lama project by extending the overall construction schedule over a longer period, which substantially alleviates near-term capital spending, and we are also working to meet regulatory requirements. We also termed out $3.0 billion of debt at attractive rates to reduce near-term maturities. And finally, in light of the current environment, we have also made a decision to lower the quarterly dividend to improve liquidity. We recognize the importance of dividends to our shareholders, and it is our goal to return more capital to investors in the future, but at this time, this is the prudent course of action.”

By MARIANNE KOBAK McKOWN Mining Quarterly Editor

ELKO — A combination of falling gold prices, rising costs at mine sites and dropping share prices forced Barrick Gold Corp. at the end of June to eliminate about 65 administrative positions in its North American region. “We’ve had a long period of growth in North America,” said Lou Schack, director of communications for Barrick Gold of North America. North American sites remain the most productive, and “we intend to keep it that way. ... To do that it is critical we cut costs,” he said. Besides increased costs at mine sites, the market value of the company is less than half of what it was a year ago, Schack said. In September, Barrick’s stock peaked at $42.86 a share, but according to MarketWatch the price was at $16.89 a share June 21. Gold prices also have affected the company. After being above $1,600 per ounce for about two years, gold began its decline. In April, it dropped below $1,400 and fell to $1,277.80 June 20. Gold had a slight up tick to $1,298.60 when it was last reported June 21. “The long strong market we’ve enjoyed seems to have come to an end,” Schack said. Part of cutting costs will include restructuring

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and downsizing. “We’ve done a thorough review of operations,” Schack said. Barrick employs 4,500 people in Nevada and will be eliminating less than 1 percent of those employees, which equates to 40 positions in the state. Salt Lake City will lose 15 positions and five to 10 positions will be eliminated at other smaller operations. All of the positions are from the administrative or support structure of the company. “Beginning (June 20) we began offering voluntary severance packages to employees,” Schack said. “The packages are generous.” Each of the employees will have about a week to review the packages and make a decision. “Letting people go is never a pleasant thing,” Schack said. The last time Barrick had layoffs was in the 1990s, he said. “We’ve been very fortunate we haven’t had to do this for some time, but we have to face reality,” said Schack. Reduction in employees isn’t the only change on the horizon for Barrick. The company’s plans for Ruby Hill Mine near the town of Eureka have been put on hold. Ruby Hill Mine will last through its mine life of 2014, but because of gold prices, will not be expanded, Schack said. The Nevada layoffs occurred after the company eliminated 100 positions at its Toronto headquarters.

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John Rasche/Mining Quarterly

Newmont Metallurgical Engineer Nicole Loehr, who played the injured pickup truck driver in the mock accident, cries as Barrick Cortez Mine Rescue team member Brian Showers tries to calm her down in July at the Safety Olympiad. In the back, spectators watch from the bleachers.

Training for disaster Rescue teams compete at Safety Olympiad By JOHN RASCHE Mining Quarterly Staff Writer

ELKO — There was an accident at the exploration site. The backhoe operator failed to notice the drill platform next to him and swung into it,propelling several large drill pipes into a nearby pickup truck. One miner died. Several others were injured. And mine rescue teams only had 30 minutes to secure the scene. The scenario was fictional, however. The corpse was a mannequin, the vehicles were predamaged,and the injured victims were actors.Everything was staged — except for the rescue teams’ performances. Fifteen mine rescue teams from across the western states faced this scenario head-on in July as part of the annual Safety Olympiad, at the Elko Convention Center. The accident was just one of the many emergency situations during the two-day event. Teams responded to scenarios involving fire, medical assistance, trauma, rope rescue and hazardous material, said Kory Soderquist, Safety Olympiad organizer and Emergency Response coordinator. “This training provides a learning experience for everyone involved,” Soderquist said. “These are all situations that could happen ... and it not only bonds team memSee OLYMPIAD, 122

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 121


Olympiad ... Continued from page 121 bers together, but all the rescue teams together as well.” The teams were scored based on certain criteria for each scenario, Soderquist said. As Barrick Gold Corp.’s Cortez Hills Mine Rescue team rushed to treat the injured at the simulated accident site on the morning of July 13, new challenges continued to pop up. Rescue members investigated one man’s odd behavior only to discover he had explosives. One random man burst onto the scene and wandered from one situation to the next, sometimes talking with the injured. Spectators sitting in the bleacher seats watched the Cortez Mine Rescue team try to contain the accident, which frequently became disorganized with hysterical crying and erratic behavior. “You never know what can happen,” said Randy Miller, who watched the rescue team from the sidelines. “All these scenarios are possibilities and can be real dangers.” Miller is the lead man and shovel operator for Newmont Mining Corp.’s Emigrant Mine. He’s been with the company for 25 years, he said.

“Everything has to be considered,” he said, noting that a staged gas canister at the far end of the scene posed a fire threat. “You have to look for hints and clues (of potential risks) — they all tie in (to the bigger problem). Anything can be a real threat in this day and age.” 2013 Safety Olympiad Results Mine Rescue Challenge — Peabody Powder River Mining (North Antelope) Rope Rescue 1st Place - Rio Tinto Minerals Boron Operations 2 2nd Place - Rio Tinto Kennecott Utah Copper 3rd Place - Round Mountain Gold 4th Place - Thunder Basin Coal Company (Black) Confined Space 1st Place - Newmont Twin Creeks 2nd Place - Round Mountain Gold 3rd Place - Peabody Powder River Mining (North Antelope) 4th Place - Thunder Basin Coal Company (Black) Hazmat 1st Place - Peabody Powder River Mining (North Antelope)

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3rd Place - Thunder Basin Coal Company (White) 4th Place - Peabody Powder River Mining (North Antelope) A Flight 1st Place - Barrick Cortez 2nd Place - Round Mountain Gold 3rd Place - Newmont Twin Creeks 4th Place - Peabody Powder River Mining (North Antelope) B Flight 1st Place -Rio Tinto Minerals Boron Operations 2 2nd Place - Thunder Basin Coal Company (White) 3rd Place - Rio Tinto Minerals Boron Operations 1 4th Place - Cloud Peak Energy John Bunch Award (Written Test): Rio Tinto Kennecott Utah Copper Hugh No. 6 OJ Laughline Award (Sportsmanship): Cloud Peak Anna Squires Award (Overall First Day): Rio Tinto Kennecott Utah Copper John Skinner Award (Overall Trainer): Mikel Riley Barrick Goldstrike


Beats from the Underground Miners rap about work, struggles Editor’s note: This story originally ran in the Elko Daily Free Press on June 1, 2013. New additions to the story have been included. By JOHN RASCHE Mining Quarterly Staff Writer

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work overtime together, he said. “Working underground, you kind of become family,� Sanchez said. “All the guys are close. ... You see these guys many hours upon hours, you know. And when we’re on shift, we see the guys more than we see our kids or our wives. They’re like our extended family.� Ultimately, Sanchez’s newly-created rap song proved to be a fitting dirge for the two men who lost their lives. The underground, Sanchez raps, is “a place where so many people have died and shared fears, the reason why so many families cried and shed tears, but also See ELEVATORZ, 124

Š Copyright 2013 Boart Longyear. All rights reserved.

ELKO — On the night rapper Roberto Sanchez penned the lyrics of the song “Losin’ My Mind,� he didn’t know it would be the same night he would lose a friend in a mining accident. It wasn’t until the next morning in 2011 that Sanchez realized his co-worker, Daniel Patrick Noel, had died in a ventilation shaft accident with Ethan Joel Schorr in Barrick Gold Corp.’s Meikle Underground Mine. “Losin’ My Mind,� in a sad coincidence, was dedicated “for those who never made it out of the underground.� “The weird thing is, I was writing that song the night they passed away,� Sanchez said, sitting in his personal studio. “No joke. I stayed up until 2 in the morning. I wrote it, I recorded it. I had no idea that they passed away. It was shocking. ...It messed with my head.� Sanchez was not on the same crew as Noel, but the two would sometimes

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This still image from Tha Elevatorz’s “Losin’ My Mind� music video shows Roberto Sanchez wearing his personal protective equipment underground.

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FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 123


Matt Unrau/Mining Quarterly

Roberto Sanchez works on his music at his studio in his house in Elko, while Rick Boltz watches.

Elevatorz ... Continued from page 123 the reason so many families stay fed, a way for my peoples to live good and get ahead...” Tha beginning of Tha Elevatorz Sanchez, who uses the stage name “iLL ZakieL,” is not the only local miner-turned-rapper in Elko. Rick Boltz, also known as “Breed Tha Loc,” also creates rap music. The two musicians met six years ago when riding the shift bus to Barrick Gold Corp.’s Goldstrike Mine. Sanchez is an equipment operator at Meikle, and Boltz is a mechanic for Rodeo. “He (Sanchez) overheard me talking on the bus

124 MINING QUARTERLY, Elko, Nevada FALL 2013

and turned around and asked, ‘what do you do? I said, ‘I rhyme, man,’” Boltz said with a smile. “It was almost like our paths were meant to meet,” Sanchez added, “because we’re both from different (areas) and somehow we ended up here, working for the same mine, riding the same bus, and doing the same thing.” When the two first met, Sanchez offered to help produce Boltz’s first solo album. “We got three-fourths of the way through it and then he sent me his own track,” Boltz said. “After he sent me the track, we both started rapping (together). ... The solo project went out the window at that point. Together, we took the quality up a

notch. It seemed like we were coming up with better stuff.” The duo became Tha Elevatorz, a homage to a song called “Elevators (Me and You)” by the hip-hop group Outkast. Sanchez, a native of Mexico, became a U.S. citizen when he was 18. Because of his former “alien” status, Tha Elevatorz has adopted the sci-fi alientheme as its own brand. The purpose of the Tha Elevatorz is to “elevate people’s minds through music and make them wake up somehow,” Sanchez said. “For the most part, we make music that is relevant to the blue-collar residence,” he continued.


“We’re not talking about flashy cars, big chains, or anything like that — I’m tired of hearing that message being sent. We are the blue-collar, so we want to stay true to who we are.” Going Underground The “Losin’ My Mind” music video, uploaded to YouTube in April, portrays Sanchez working in the underground mine. Clips of him working in the dark tunnels are juxtaposed with scenes of him in the Nevadan desert, sitting on his truck bed next to a case of beer. Various locations of Elko are also incorporated into the video. He works underground, he raps, “because my family’s happiness is a necessity. No matter risking life or death, they always come ahead of me.” The duality of the job is a message that is embodied in almost every verse. “I think the main point of that ‘Losin’ My Mind’ track isn’t ‘I hate my job. I need to get out of here, it’s more (like I’m) ‘losin’ my mind from not being able to do what I love to make a living so I’m working at the mines instead,’” Sanchez said. “If you can do what you love and provide for your family, and you don’t Roberto Sanchez, right, and Rick Boltz form the Elko rap group called “Tha Elevatorz.” have to worry, then why would you not do it? Why would you choose to go 1,500 feet under the ground? But this is what will provide the lifestyle that my family deserves to have.” As an integral element of Tha Elevatorz, the mining industry has provided job security and a unique bond between co-workers. But, as with many of Tha Elevatorz. Shortly after the Free Press ran an labor-intensive careers, there are risks. article about Johnson back in March, the rap duo “We’ve seen the dark side of mining,” Sanchez said. “We’ve seen our friends die, we’ve seen friends contacted him. The artists are now collaborating on a song break ankles and get hurt. We do our best to be safe, together. but things happen. People can get hurt anywhere. “It’s nice to hear something come from Elko as ...(but) we appreciate 100 percent what the mines talented as (The Elevatorz) are and who are on the do. If it weren’t for the mines, who knows? I same level of hip-hop that I’m on,” Johnson said couldn’t make ends meet.” during a phone interview with the Free Press. “Their music is about real life situations and their songs are Gaining support more expressive than boastful.” So far, fellow underground workers have praised Johnson is “hopeful” that his hometown may one the men’s music, Sanchez said. day welcome a rap scene. “I’ve got nothing but positive reviews,” he said. “Rap, in the last couple of years, has really broad“Even cowboy-hat dudes are like, ‘I don’t listen to ened (among audiences) ... and that includes the (rap), but I respect what you do and you are blue-collar atmosphere, the people who get their extremely good.’ It’s cool to hear that from the other hands dirty and work hard.” side.” In Elko, rap often takes a backseat to more promiTha Elevatorz’s first album, “Elevate Your Mind,” nent genres of music. Tha Elevatorz hopes that will was released through iTunes on Oct. 31, 2012. change. Elko native Dallas Johnson, an aspiring rapper in “Our first goal is to become well known here. ... Seattle known as “Parker Dallas,” is also a supporter

Watch an exclusive web video of Tha Elevatorz performing in their studio at www.elkodaily.com.

Matt Unrau/Elko Daily Free Press

Elko is a big thing for us. We believe you got to represent where you’re from, man. If you can’t get support here, then you aren’t going to get it anywhere else,” Sanchez said. Two months later The Free Press contacted Sanchez a few weeks after the article ran to see how the rap duo was coming along. “It’s been good,” Sanchez said. “We put together a new music video and we’re one verse away from finishing our next project, a mixtape on iTunes.” Sanchez said the 16-song mixtape, which includes the collaboration with Parker Dallas, will be available for free download. “Our fanbase is growing every day,” Sanchez said. “We’re trying to focus on making more music videos, because with each video, the numbers (of views) jump up.” Since the article was published, Sanchez said other local rappers have reached out to him as well. “We’re not the only ones ... and we’re in talks for doing some shows pretty soon,” he said. For more information about Tha Elevatorz, visit thaelevatorz.com or find the duo’s Facebook Page.

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 125


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ELKO — A cash infusion into a Nevada charity will enable the group to help more disabled people experience the outdoors. Nevada Outdoorsmen in Wheelchairs received two donations in June that will allow the organization to continue taking wheelchair-bound people to areas they normally could not access. The nonprofit was started in 2008, said Chad Bliss, president of the Nevada Outdoorsmen in Wheelchairs. In 2011, the Newmont Mining Corp.’s TS Ranch in Boulder Valley became the place for the participants and volunteers to stay for a week of outdoor activities, including an antelope hunt. The hunts are filmed and televised by Jay Presti of Blue Collar Adventures. “We provide an opportunity for people to get back into the outdoors,” Bliss said. The participants stay at the TS Ranch in the guest house, which is handicap accessible. While at the ranch, they are taken on an antelope hunt, visit a Newmont mine and experience other outdoor activities, said Matt Murray, Newmont senior external communications representative and Nevada Outdoorsmen in Wheelchairs board member. “We offer them an opportunity to get out of their comfort zone,” Murray said. “The hunt is what draws us together, but it’s the other opportunities that are the most memorable.” When participants were asked their favorite memory of the week they usually say the simple activities like skipping rocks or sleeping under the stars, Murray said. “We had a gal last year who had never hunted before, who had never shot a gun before,” Bliss said. “This proves to them they can do more.” The trip is fully funded by the organization, from the time they get in the car to the time they return back to their home, Bliss said. “It’s truly changed people’s lives, not just the people who participate but for the


board and the volunteers,” he said. “For a short period of time our hunters are on equal ground with everyone else,” Murray said. Bliss agreed. “They forget they have a disability,” Bliss said. “I do this just to give them that minute. We’ve had people injured in auto or rodeo accidents and those born with disabilities.” “It’s a fun week,” Murray said. “Joe Doucette (of the Nevada Department of Wildlife) is our cook and gives fly fishing lessons.” Bliss said he and Murray want the organization to grow larger. Hopefully with recent donations, the group will be able to help more people, he said. In May, several organizations came together to raise money for Nevada Outdoorsmen in Wheelchairs. Murray, as a board member of the group, approached Dan Gralian and Jeff White of Elko Land and Livestock Co., which runs the TS Ranch, to donate a 2014 land owner mule deer tag for auction to benefit the nonprofit. “Once they agreed to donate the deer tag, I called Farley Hicks with the Mule Deer Foundation and asked if I could take advantage of the audience of hunters that attend the MDF Banquet and auction off the package that we put together for

To Donate Go to www.nvoutdoorsmen.com or send a check to Nevada Outdoorsmen in Wheelchairs PO Box 908 Elko, NV 89803

Submitted

Hunters Lisa Rieger and Brian Martinez hold onto their antelopes at the TS Ranch in 2012, while Nevada Outdoorsmen in Wheelchairs representatives Chad Bliss,left, and Matt Murray stand behind them. NOW,” Murray said. “Farley agreed and thought it was such a great idea that the Great Basin Chapter of MDF donated a rifle to go along with the hunt package.” Mitch Buzzetti of Nevada High Desert

Outfitters donated the guide service for the package. At the annual fundraiser, Susie and Rich Sandoz purchased the package for $5,200, but since Susie Sandoz is a bow

hunter, she donated the rifle back to the organization and it was auctioned off again. KAP Mechanical Services bought the rifle for $2,200. This $7,400 wasn’t the only money the group received this year. The Newmont Legacy Fund donated $33,987 last week. “Because of Newmont, our program is as successful as it is today,” Bliss said. “I want to thank all the employees at Newmont. We’re thankful for what they do and their generosity. When that money comes out of their check, whether they know it or not, is making life changing experiences for people they don’t even know.”

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Miner killed at Newmont Exodus Underground Mine By MARIANNE KOBAK McKOWN Mining Quarterly Editor

ELKO — An Elko-area miner died in an accident June 2 at Newmont Mining Corp.’s Exodus Underground Mine. Corey Vasquez, 43, was killed while operating a loader during the night shift, said Newmont Director of External Relations Mary Korpi. The Exodus Mine was shutdown and continued to be closed June 3. Parts of the mine were opened over the next few days and other portions remained closed until the investigation was complete, Korpi said. Vasquez and his family lived near South Fork and he had worked for Newmont since February 2011, said Korpi. “Our thoughts and prayers are with Corey’s family, and we are providing all possible assistance during this tragic time,” Korpi said. “As we reach out to Corey’s family and share in their grief, we must remain focused on ensuring the personal safety of all our employees and contractors.” The accident occurred at about 8:15 p.m. in the mine 25 miles north of Carlin in Eureka County. Mine Safety and Health Administration and the Nevada Mine Inspector’s Office were notified immediately. “We are working with them to thoroughly investigate the cause of this accident,” Korpi said. “We appreciate the assistance of employees and the Eureka County Sheriff’s Office who responded quickly following the event.”

128 MINING QUARTERLY, Elko, Nevada FALL 2013

No other information on the accident was available. “The investigation is in the very early stages so it is premature to speculate on the potential causes,” Korpi said. “As with all accidents we are fully committed to learning how this accident occurred so that we can take the steps to prevent similar incidents in the future.” This is the second fatal accident in a Nevada mine this year. The first was Jan. 21 at the Apex Quarry and Plant in Clark County. Apex is owned by Lhoist North America of Arizona Inc. A 54-year old mechanic with six years of experience was killed at a lime operation. The victim went to a kiln pre-heat deck to repair a leaking hydraulic cylinder that activates a pusher arm on the kiln. He was caught between the corner of the angle iron and the plate connecting the push rods. Vasquez’s fatal accident is the eighth death in metal and non-metal mines and the 16th death in any mine in the country for 2013. This is the second fatality in less than a year in the Exodus Underground. Allen Campbell, 49, of Spring Creek died in an accident Aug. 31. Campbell fell through a hole that had developed beneath bridged material in an open stope, according to an MSHA report. He “fell approximately 90 feet from the drift he was working into the muck pile on the level below.”

MSHA reports 18 miners die in first-half of 2013 ARLINGTON, Va. — The U.S. Department of Labor’s Mine Safety and Health Administration on July 31 released a mid-year summary of mining deaths across the country. During the first half of 2013, 18 miners died in work-related accidents at the nation’s mines, one less than in the first half of 2012. Nine each were killed in coal mining and metal and non-metal mining accidents. Six coal miners died in less than 30 days – four of them in West Virginia – which led to increased actions by MSHA. In both coal and metal and nonmetal mining, one of the miners killed was a contractor. Among the nine coal mining deaths, two miners died in machinery accidents, three in powered haulage accidents, and two in roof fall accidents. One miner died in an accident resulting from exploding vessels under pressure when he was struck by a hydraulic cylinder on a filter press, and one was killed in a hoisting accident. In metal and nonmetal mining, one miner died in a fall of highwall, one was killed in a machinery acciSee MSHA, 130


Marianne Kobak McKown/Mining Quarterly

A diesel shovel loads one of Allied Nevada’s haul trucks in February at the Hycroft Mine.

Hycroft troubles trickle down, creating a flood of concern in Winnemucca By DEE HOLZEL Mining Quarterly Correspondent

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WINNEMUCCA — While the rest of the country wallowed through a lengthy recession, Winnemucca prospered due in large part to the strength of mining. Among the mining Cinderella stories was Nevada Allied Gold’s Hycroft mine. With gold at record highs, the mining company planned for a $1.2 billion expansion including construction of a new mill capable of processing 130,000 tons per day. Things were looking so good, the one serious issue the company had was the lack of available housing for its expanded workforce. So, the company entered into an agreement with Reno developer Alan Means for temporary worker housing within a new subdivision Means was in the process of developing. Anticipating available housing might become a problem, Allied Nevada also contracted for the construction of 90 homes (in combination of townhouses and single-family units in the new development) exclusively for its workforce The homes were tailored to meet the wants of miners and their families, with extra space for trucks and ATVs. All was looking promising for Hycroft and Winnemucca. Then the price of gold began to drop a bit. Then a bit more. Then came the news production and sales in the first half of 2013 were below what was projected, primarily due to a glitch with the Lewis leach pad. The company determined a significant portion of the ore placed on the Lewis leach pad in late 2012 and early 2013 - when the mining rate was increasing significantly — was not properly leached due to insufficient solution application. With profits less than expected, and in reaction to the gold market, Allied’s stocks began a downward spiral. In order to retrench, the company began taking steps to save money. One of those steps was the reduction in workforce of 115 people and some contractors. Rather than give 60 days notice, as required under the WARN Act, the company gave two months salary to the employees being laid off. The layoff left about 400 people still employed at the mine, which was the same

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FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 129


MSHA ... Continued from page 128 dent, and one miner died in an accident involving explosives and breaking agents. Four miners were killed in powered haulage accidents and two miners in falling material accidents. “The one recurring element in the fatalities we’ve seen this year is that they were preventable. The final numbers released by MSHA earlier this month showed that 2012 had the lowest mining death and injury rates in the history of U.S. mining,” said Joseph A. Main, assistant secretary of labor for mine safety and health. “Many mines operate every shift of every day, year in and year out, without a fatality or a lost-time injury. Mining workplaces can and must be made safe for all miners.” According to MSHA, fatalities can be prevented by using effective safety and health management programs in the workplace. Workplace examinations for hazards – pre-shift and on-shift every shift – can identify and eliminate hazards that kill and injure miners. Effective and appropriate training better positions miners to recognize and understand hazards and find ways to control or eliminate them. Furthermore, miners must be free to exercise their rights under the Federal Mine Safety and Health Act of 1977 and be full participants in maintaining a safe and healthful workplace. To review MSHA’s analysis of mining fatalities that occurred during the first half of 2013, along with best practices to help mining operations avoid similar fatalities, go to the agency’s website at http://www.msha.gov/fatals/summaries/summaries.asp. This information also has been provided directly to miners, mine operators and mine safety trainers.

Got mining news? Send your story or news tip to mining@elkodaily.com

Dee Holzel/Mining Quarterly

At left: Construction on the planned subdivision and temporary workers camp for the Hycroft Mine has slowed significantly. At right: Construction of a new road continues despite the slow down on building the adjacent subdivision. The development was a project of Allied Nevada, which had plans to hire more workers until a set back occurred at its Hycroft Mine.

Hycroft ... Continued from page 129 number they started the year with. The company did not follow the “last hired, first fired” philosophy. Instead, the reductions occurred across many departments while the exploration department was eliminated altogether — including staff working in the explorations unit at the corporate office. Commenting on the layoffs and the problems with cash flow, Tracy Thom of Allied Nevada said, “We had to look at cost structure and become a more efficient mine.” She added, “We would have preferred not to have to do this, but we had to react to the price of gold and silver coming down.” Although the explorations division was eliminated the company will hold onto the property under exploration and pay the land-hold fees, but for the time being Thorn said they’ll be taking a focused look at the Hycroft Mine. That focused look included halting the construction of the new processing mill, which the company has already invested $90 million in, until a feasibility study could be completed. Deferring the construction of the mill was no small matter for the community gearing up to provide housing and services to what they believed would be hundreds of temporary residents for the construction phase then later an increase in permanent new residents to work the mill. In response to the news from Hycroft, construction at the new development has slowed considerably, though Allied Gold has said it would honor its contract with Means. Community members can’t help but notice the new subdivision has stopped taking shape. Taxpayers have begun to question the deal Winnemucca worked out with the developer in which the city agreed to pay $736,000 up front for road construction near the development, with Means completing the work and reimbursing the money by December 2015.

130 MINING QUARTERLY, Elko, Nevada FALL 2013

With things going south at Hycroft, and progress of the new development on hold, some taxpayers have begun to wonder if that money will ever be paid back. Mayor DiAn Putnam said the city had a meeting with the developer and is confident he will abide by the contract. She pointed out whatever happens, residents will have use of the road, which is expected to alleviate traffic congestion in the area. Putnam pointed out Hycroft still has about the same number of people employed as it did at the beginning of the year, so the impact in terms of the development involves people who haven’t moved to the city yet — such as those who might have been employed at the mill. She also expressed confidence Hycroft would meet its obligations moving forward. Putnam said basically the community is in “wait and see” mode. As in, wait and see what the price of gold does in the future. Warren Woods, vice president of asset management at Hycroft, was recently before the Humboldt County Commission to give an update on the situation at the mine. He said the company hopes to hire back many of the employees who were laid off once things stabilize. He said the company did not anticipate further layoffs and they were moving forward with the commitments made in connection to the housing development. Woods explained getting the heap leach pad up to proper performance was a priority to ensure they have a good cash flow moving forward. Woods added, “I think we’re headed in the right direction.”


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Active mines, oil fields and geothermal plants as of 2011. Information courtesy of College of Science Mackay School of Earth Sciences and Engineering at the University of Nevada, Reno and the Nevada Bureau of Mines and Geology

FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 133


ADVERTISERS INDEX Alphabetical 3D CONCRETE, INC ...................................................................................111 5TH GEAR POWERSPORTS ........................................................................50 AHERN RENTALS .........................................................................................88 AK EARTHMOVERS ...................................................................................115 AGRU AMERICA ...........................................................................................43 ALBARRIE ENVIRONMENTAL SERVICE ...............................................80 ALLIANCE DOCUMENT TECHNOLOGIES .........................................132 ALS LABORATORY GROUP .....................................................................122 AMEC ENVIRONMENT & INFRASTRUCTURE ..................................107 AMERCABLE ................................................................................................132 AMERICAN STAFFING, INC.......................................................................96 AMES CONSTRUCTION ...........................................................................109 ARCADIS US, INC .......................................................................................113 ARNOLD MACHINERY .............................................................................131 ASGCO MANUFACTURING INC ..............................................................35 ASSA ABLOY ENTRANCE SYSTEM ..........................................................30 ATLAS COPCO ...............................................................................................83 AZTEC COATINGS .....................................................................................123 BARRICK .........................................................................................................17 BC WIRE ROPE & RIGGING .......................................................................35 BEL-RAY ............................................................................................................7 BLACK ROCK DRILLING ............................................................................28 BLAINE EQUIPMENT COMPANY, INC. ................................................120 BOART LONGYEAR DRILLING SERVICES ............................Back Cover BOART LONGYEAR DRILLING SERVICES ....................... Center Spread BOART LONGYEAR DRILLING SERVICES ..........................................123 BOOT BARN, INC............................................................................................9 BOSS TANKS ...................................................................................................28 BROADBENT& ASSOC. INC .......................................................................42 BRUNNER & LAY ..........................................................................................78 CARIBOU INC................................................................................................81 CARLIN TREND ............................................................................................38 CASHMAN EQUIPMENT ............................................................................97 CASHMAN EQUIPMENT ............................................................................41 CASHMAN EQUIPMENT ..........................................................................136 CATE INDUSTRIAL ......................................................................................62 CATE NEVADA ................................................................................................6 CDC RESTORATION & CONSTRUCTION ...............................................6 CEMENTATION .............................................................................................80 CHAMBERS GROUP .....................................................................................38 CHEMTREAT..................................................................................................64 CLEAN HARBORS ENVIRONMENTAL SERVICES ...............................66 COACH USA / ELKO INC ............................................................................79

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COACH USA / ELKO INC ..............................................................................3 COMMITTEE TO ELECT JOHN ELLISON ..............................................15 COMPRESSOR PUMP & SERVICE, INC .................................................118 CONNORS DRILLING ..................................................................................66 CONSOLIDATED ELECTRICAL DISTRIBUTORS. ..................................5 CRAWFORD DOOR SALES ...........................................................................9 DMC MINING ................................................................................................44 ELKO CONVENTION AND VISITORS AUTHORITY .............................5 ELKO TOOL AND FASTENER ..................................................................121 ELKO WIRE ROPE & MINING SUPPLY ...................................................48 ELKO WOMENS HEALTH CENTER .........................................................26 ENCORE AUDIO VISUAL DESIGN .........................................................114 ENVIROSCIENTISTS, INC...........................................................................26 ESCO SUPPLY .................................................................................................22 FABEN CO, INC ............................................................................................129 FAIRMONT SUPPLY COMPANY .............................................................127 FAST TRACK TRANSPORT LLC ..............................................................128 FERGUSON ENTERPRISES .......................................................................126 FLOW CONTROL EQUIPMENT ..............................................................126 FORD STEEL ...................................................................................................74 FORDIA USA ..................................................................................................74 GCR TIRE CENTER .......................................................................................90 GENERAL MOLY, INC. .................................................................................42 GENERAL TOOL INC ...................................................................................12 GHX INDUSTRIAL ........................................................................................93 GOLD DUST WEST - ELKO .........................................................................90 GRANITE CONSTRUCTION ......................................................................25 GRAYMONT WESTERN US INC ...............................................................72 GREAT BASIN INDUSTRIAL ......................................................................72 HAMILTON SOLAR ......................................................................................16 HANLON ENGINEERING ...................................................... Center Spread HARD ROK EQUIPMENT, INC. .................................................................16 HAYLEY’S FINE GIFTS .................................................................................75 HEDWELD USA .............................................................................................61 HIGH MARK CONSTRUCTION ................................................................63 INTEGRATED POWER SERVICES, LLC ...................................................54 J.S. REDPATH CORPORATION ..................................................................46 JBR ENVIRONMENTAL CONSULTANTS,...............................................38 JCR DEVELOPMENT ....................................................................................18 JENNMAR CORP............................................................................................13 JENTECH DRILLING SUPPLY ...................................................................11 JOHN DAVIS TRUCKING ............................................................................15 KEJR, INC GEOPROBE SYSTEMS ..............................................................73


ADVERTISERS INDEX Alphabetical KENWORTH SALES ......................................................................................75 KIVA ENERGY................................................................................................77 KNIGHT PIESOLD AND CO. ......................................................................77 KOMATSU EQUIPMENT COMPANY .......................... Inside Back Cover LEDCOR ..........................................................................................................19 LEGARZA EXPLORATION..........................................................................51 LES SCHWAB/ELKO......................................................................................52 LIEBHERR MINING EQUIPMENT............................................................10 LOGAN CORPORATION .............................................................................10 MAP SCIENCE CORP ...................................................................................49 MASS MEDIA- SW GAS................................................................................36 MIDWEST INDUSTRIAL SUPPLY .............................................................37 MINE SOURCE INC. ...................................................................................122 MINING & ENVIRONMENTAL SERVICE ...............................................32 MOUNTAIN STATES CONTRACTING ....................................................52 MYRNA HOT SHOT .....................................................................................32 MYRNA HOT SHOT .....................................................................................96 NA DEGERSTROM ........................................................................................23 NATIONAL EXPLORATION ..........................................Inside Front Cover NEFF’S DIESEL ...............................................................................................29 NEWMONT.....................................................................................................34 NORTHERN NEVADA EQUIPMENT .....................................................117 NORTHERN NEVADA EQUIPMENT .......................................................27 OAK TREE INN ............................................................................................128 ORMAZA CONSTRUCTION ....................................................................119 P&H MINEPRO SERVICE ....................................................... Center Spread PAC-VAN .........................................................................................................49 PLUMB LINE MECHANICAL .....................................................................47 PLUMB LINE MECHANICAL ...................................................................128 POLELINE CONTRACTORS .......................................................................47 PRECISION AIR CARGO INC .....................................................................68 Q & D CONSTRUCTION .............................................................................55 RAM ENTERPRISE INC ...............................................................................31 RAPID TRANSPORT, LLC ............................................................................57 RED LODGE PARALEGAL SERVICES ......................................................57 REDI SERVICES LLC .....................................................................................65 ROCKMORE INTERNATIONAL ................................................................68 ROSS EQUIPMENT .......................................................................................34 ROUND MOUNTAIN GOLD CORP...........................................................59 ROYAL GOLD .................................................................................................67 RUBY VISTA LODGING ASSOCIATION ..................................................39 RUD-CHAIN, INC./ ERLAU.........................................................................67 S&G ELECTRIC MOTOR REPAIR ..............................................................71

SACRISON ENGINEERING.........................................................................57 SAN JUAN DRILLING...................................................................................71 SAS GLOBAL MINING CORP .....................................................................53 SCOTTS MARKET LLC ................................................................................32 SGS MINERALS ..............................................................................................84 SIERRA FREIGHTLINER..............................................................................87 SILVER STATE FIRE ......................................................................................86 SLEEPSOURCE/ENCORE ............................................................................56 SMALL MINE DEVELOPMENT LLC ........................................................92 SNYDER MECHANICAL..............................................................................89 SRK CONSULTING........................................................................................89 SUMMIT AIR AMBULANCE .......................................................................87 SUMMIT ENGINEERING ............................................................................91 T. F. HUDGINS, INC.......................................................................................79 TAHOE RESOURCES INC............................................................................94 TAYLOR MADE IRON SERVICES ..............................................................91 TECH-FLOW ..................................................................................................95 TETRA TECH INC. ......................................................................................102 TMEIC ............................................................................................................101 TONATEC EXPLORATION, LLC ..............................................................106 TRAYLOR BROS., INC.................................................................................103 TREAD CORP ...............................................................................................102 VALLEY RUBBER & GASKET ...................................................................107 VICTAULIC ...................................................................................................105 VOGUE DRY CLEANERS...........................................................................111 WALLACE MORRIS SURVEYING ..............................................................57 WALLACE MORRIS SURVEYING ............................................................111 WALLACE MORRIS SURVEYING ................................................................5 WELSH HAGEN ASSOCIATES .................................................................108 WORLDWIDE RENTAL SERVICES .........................................................110 WYOMING, INC ............................................................................................21 YANKE MACHINE SHOP ..........................................................................108

To Advertise in the Mining Quarterly please call:

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FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 135


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Mining Quarterly Fall 2013 edition  

The Mining Quarterly covers the hardrock mining industry and related businesses in the Western U.S., especially Nevada.

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