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
Fa ll 201 3
Rock to Copper Plate
Scott Collins, project controls manager at Newmont Mining Corp.â€™s Phoenix Mine, describes the new copper processing facility.
Marianne Kobak McKown/Mining Quarterly
— INSIDE — WASTE TO REVENUE —
Phoenix will process copper
NEWMONT Investing in a recreation area — Payraise producing to 2014 —
No end to ore yet at Pete Bajo —
VERIS GOLD Starvation Canyon opens —
BARRICK Efficiency, safety at Cortez — Leadership classes at UNR —
GOLDCORP Marigold looks to future — Page 58
BLASTS FROM THE PAST SERIES Silver Veins to clay pots —
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 This bill repealed a provision in the state money to earning it.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 firstname.lastname@example.org.
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.â€™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
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.â€™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. â€œWe separate the copper from the acid by introducing an organic solution,â€? Collins said. â€œThen we introduce the electrolyte solution in the tank farms. The electrolyte solution cleans the solution of the crud, then itâ€™s sent on to the electrowinning process and copper plates are produced.â€? 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. â€œThe copper wonâ€™t stick to (the anode),â€? 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.â€™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.
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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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Jackson Ripley, 15 months old, plays in a stream while Shar Peterson watches at the upper pond of the Willow Creek Recreation Area.
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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 โNo 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. โThe 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. โPeople have been camping all over the area,โ said Ethan Arky, outdoor recreation planner for the BLM. โSo we put in some features to direct camping to certain areas, donโt 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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FALL 2013 ELKO DAILY FREE PRESS, Elko, Nevada 19
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.
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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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