Page 1

Q

INSIDE

1 year at Long Canyon • 12 EPA visits NV • 21 Gold Bar construction • 40

UARTERLY

Spring 2018

Future

BARRICK DIGS

INTO DIGITAL AT CORTEZ

Past


2 • MINING QUARTERLY, Elko, Nevada SPRING 2018

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FEATURED CONTENTS COVER STORY

FROM THE EDITOR Barrick digs into digital at Cortez Innovation drives progress..Page 5

TOP STORIES A productive year at Long Canyon Newmont reflects on first year ........................... Page 12

Premier to go underground at Cove

Strikes agreement with Barrick ......................Page 16

EPA’s Pruitt visits Coeur mine

Leader promotes stewardship ...................... Page 21

Anaconda fate in state, private hands

EPA, state sign Superfund deferral ............................ Page 24

A new lease on Nevada oil?

Interest in Rubies sparks debate.................. Page 30

McEwen builds Gold Bar project

A greenfield open pit gold mine.........................Page 40

ON THE COVER CLOCKWISE FROM TOP: Barrick Gold Corp. employees demonstrate digital mining tools at AUOps. A worker sprays shotcrete onto the face of a future underground portal in the Cortez District. The more than 150-year-old mills remain near the modern mine site. Photos by Suzanne Featherston More contents ................ Page 4

Igniting NV oil industry

T

h e oil shale glows red under the heat of a butane torch. The rock is on fire! Smaller than the blaze on a matchstick, the flame flickers for about three seconds then goes out. Wisps of gray SUZANNE FEATHERSTON smoke swirl in the air, and I waft the fumes toward my nose: It smells like burning rubber or freshly laid asphalt. Technically, it is the organic material, or kerogen, in the shale that burns. Oil shale formed after silt and organic debris were deposited in basins then succumbed to time, heat and pressure. If the rock were crushed and exposed to a much hotter temperature, a petroleum-like liquid would emerge that could be separated and collected. That’s what oil shale pioneer Robert Catlin did in the early 1900s when he formed the Catlin Shale Products Co. in the hills south of Elko. The slice of oil shale lit up in my garage came from the same deposit that caught Catlin’s

attention before the turn of the 20th century. A similar flicker could be what led Catlin to establish what was later billed as “the only successful shale oil manufacturing plant in America and the only plant in the world treating shale in mass, the Elko Daily Free Press reported in 1920. His experiments in Elko County sparked an interest in developing oil in northeastern Nevada that continues to this day. In 1917, Catlin opened a processing plant as a testing facility. At its peak, the operation mined from five tunnels reaching depths of 600 feet, employed about 50 people and made use of a retort that produced 26,000 gallons of oil a week, according to a 1974 issue of Northeastern Nevada Historical Society Quarterly. Miners removed shale by blasting then crushed the rock before burning it in producers, which were fired with sagebrush, the museum quarterly reports. Burning the shale generated a “dark, heavy” and “putrid-smelling gas” that was condensed and converted into crude oil, then refined and separated into oil, gasoline

and paraffin. Paraffin was the main product created from the Catlin operation, and “Hi-Power Catlin Oil,” a high paraffin lubricant, could be purchased in Elko for $5 a gallon, according to Elko Daily Free Press archives, although the product properly functioned in engines only in warm temperatures. Other products included road tar, wax and chewing gum. The Catlin plant closed in 1924, and the owner later reported that “it cost more to produce oil than it could be sold for at the present time,” according to a 1925 Elko Daily Free Press article. His work in oil shale, however, helped pioneer the way for Nevada’s modern but relatively small oil industry. Over the past 100 years as technology evolved and the price of oil changes, producers come and go in what is still a frontier state for oil. Read more about Nevada’s past and present oil and gas industry on Page 30.

Contact Suzanne Featherston, Mining Quarterly editor, with story ideas or suggestions at sfeatherston@elkodaily.com or 775-748-2715


4 • MINING QUARTERLY, Elko, Nevada SPRING 2018

B ‌ USINESS

CONTENTS

Komatsu hits 10 years of autonomous trucks...................... Page 52 Atlas Copco, Epiroc split .........................................................Page 56

PEOPLE

FEATURES Safety drives truck shop at Carlin • Page 27

People of Mines ......................................................................Page 68

COMMUNITY

Barrick pledges $100K to endowment ................................ Page 44 Newmont donates to Elko sports complex ..........................Page 46

EXPLORATION

Goldstorm core unearths surprises ......................................Page 58 eCobalt increases resource estimate ....................................Page 59

SAFETY

Fewer metal/nonmetal fatalities in 2017 .............................Page 50 Mines maintain strict marijuana policies ............................ Page 60

INDUSTRY

Gold prices rose 12.67% in 2017 .......................................... Page 48 Industry Ingots ........................................................................Page 63 U.S. dependent on foreign minerals .....................................Page 66 Executive order prioritizes U.S. minerals ............................. Page 67 Mining companies report Q4 results ....................................Page 69

HISTORY

Back to Bullion ........................................................................Page 83

COLUMNISTS

Editor: Igniting NV oil industry .................................................Page 3 Taylor: Impact of tax reform on mining................................ Page 72 NvMA: Online resources just a click away ............................ Page 74 Boyce: A little innovation goes a long way........................... Page 76 Dobra: Next commodity price cycle...................................... Page 78

Ormat to expand Austin geothermal plant • Page 38 Q&A with Rebecca Darling • Page 54

ONLINE EXTRAS See more on miningquarterly. com and follow Mining Quarterly on Facebook.

MINING QUARTERLY Travis Quast: Publisher Suzanne Featherston: Editor, 775-748-2715 Advertising: 775-738-3118. Subscriptions: 775-748-2728. Mining Quarterly is published in March, June, September and December by the Elko Daily Free Press (USPS No. 173-4320) at 3720 Idaho St., Elko, Nevada 89801, by Lee Publications Inc., a subsidiary of Lee Enterprises. Periodical postage paid at the Elko Post Office.

MQ photo contest winners • Page 80


ELKO DAILY FREE PRESS, Elko, Nevada • 5

COVER STORY

Barrick digs into digital at Cortez Pilot projects lay foundation for innovation

STORY AND PHOTOS BY SUZANNE FEATHERSTON Mining Quarterly editor

W

orkers spray shotcrete onto the face of a future mine portal in the construction of what will be the newest underground access in Barrick Gold Corp.’s Cortez District operations that could possibly sustain the site for decades. “This is about as new as it gets,” said George Fennemore, growth manager for Barrick Nevada, which includes the Cortez and Goldstrike operations, in late January. “There is nothing quite as exciting as being able to do something new and different.” The portal, pending permitting approval, will tunnel into the Cortez Mountains, chasing the Goldrush deposit. Goldrush has the potential to become Barrick’s newest underground mine in Nevada, with first production expected as early as 2021, and

Above: Barrick Nevada AUOps superintendent Frank Carr consults with an analyst at the Analytics and Unified Operations Center in January. AUOps was completed in June 2017. Top: George Fennemore, growth manager for Barrick Nevada, looks over a blast pattern during construction of some of the first benches in the Crossroads open pit in the Cortez District. “It’s not too many times you get to look at a new bench being cut,” he said.

sustained production by 2023, according to the company’s yearend report. The project lies in a silver, copper, gold and turquoise mining district that is more than 150 years old. Nearby, the ground opens

up into a maturing Cortez Hills open pit, expected to have about a year and a half of life remaining. Below, the ruins of the area’s 1870s-era four-story mill crumble downslope. Down the canyon in Crescent Valley, one of the

world’s first full-size heap leach sites now rests in reclamation. Like the successive benches in an open pit mine, the layers of history illustrate advances in methods that led to the industry’s continuation, not just in the Cortez District, but in the state and world. Through a focus on digital technology and automated processes, Barrick Nevada is embarking on what could be the next bench in mining history. In 2017, the company laid the foundation for digital transformation through a series of pilot projects, primarily focused on Cortez, Barrick reported in its year-end results. “The mine operators here in Nevada have a history of innovation,” Fennemore said. “What we are doing now is simply the next step in a long run of innovative thinking.” See Digital, 6


6 • MINING QUARTERLY, SPRING 2018

Digital From 5

Mining in transition

Barrick Gold Corp. has invested millions into the digital transformation of Barrick Nevada since partnering with Cisco Systems in fall 2016. The pilot project aims to increase efficiency and save money to help sustain mining operations in Northern Nevada. If successful, said Barrick communications manager Leslie Maple, digital applications could be implemented at Barrick operations around the globe. “You can control [costs] with automation and information flow,” Fennemore said, explaining that controlling costs makes operations less dependent on the price of gold. The effort involves operating

Cortez and Goldstrike under one management team, and providing data analysis through the Analytics and Unified Operations Center, or AUOps, at the Barrick Shared Business Center in Elko. “Part of the digital transformation is mainly to get the right information to the right people at the right time,” said Emrah Yalcin, digital implementation manager at Barrick Nevada. “So what is the motivation behind the AUOps or, in general, digital transformation? Barrick is, like most other companies, we want to generate additional free cash flow.” Barrick leadership recognized the potential in continuing to develop its resources in Northern Nevada but observed the challenges presented by maturing mines and aging infrastructure, Fennemore explained.

“You really do have mining in transition,” he said. “I think that’s what triggered all the digital and automation in the work that we do.”

Data interaction

The company’s mills at Cortez and Goldstrike are decades old, Fennemore said, and building new ones could cost about $1 billion each. To run properly, the mills must run a blend of high-grade and low-grade ore together, and the material could come from any source in Barrick Nevada — from Cortez’s or Goldstrike’s surface or underground operations. Data capture and analysis helps the Barrick team understand how to maximize the efficiency and lifespans of the mills already in existence. “That’s how you optimize these mines,” Fennemore said. He explained that projects

under Barrick Nevada must be brought on in groups so that low quantities of high-grade ore from underground can be blended at the appropriate mill with high quantities of lowgrade ore from open pits. At Cortez, the underground project is being developed at about the same time as the new Crossroads open pit, which also corresponds roughly with the phasing out of the Cortez Hills open pit, which has about 18 months left in operation. Material from the Crossroads open pit could be processed at Cortez’s or Goldstrike’s mills, Fennemore said. Mining and milling at multiple locations adds a level of complexity that data-based decision-making helps unravel. At AUOps, superintendent Frank Carr, shows how sensors See Digital, 8

The Cortez Consolidated Mill ran from about 1870 to 1920 using furnaces fueled by sagebrush charcoal and brick-lined mills in a four-story building. Barrick Gold Corp.’s ongoing operations including building a new underground portal is taking place in the hills just behind the former mill site.


SPRING 2018 ELKO DAILY FREE PRESS, Elko, Nevada • 7

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8 • MINING QUARTERLY, SPRING 2018

Digital From 6

in the mills report the quantities of chemicals being used for processing. Meanwhile, GPS tracks the location of trucks bringing fresh chemicals and ore. Having all the data allows the team to understand variances and take action to reduce losses. Digitization also lets the mill do part of the response, eliminating lag time. “We can actually interact with our data,” Carr said.

Meaningful data

As Barrick Nevada works toward bringing the “digital visualization” to reality, AUOps is just part of the program that will include digital technology at surface, underground and support operations. “What we are doing here is collecting data from sites, and this data we are converting then into meaningful data,” said Yalcin, who explained that AUOps is not a command center. “What we do here is support our operations to make better decisions by using this data converted to meaningful information.” Hard-wired internet and wi-fi at mine sites, and high-powered data storage at Switch near Henderson and on servers at Barrick help facilitate information processing. Digital tools to be incorporated include smart technologies, machine learning, predictive analysis, data analytics and automation — including the implementation of automated underground drills and the use of autonomous haul trucks, which Barrick plans to test in surface operations in the near future. “This will be a continuous process: visiting our operations, understanding their needs and trying to find a solution here – keeping the data at the center of this,” Yalcin said, explaining

GSI safety representative Johnny Carmack oversees the construction of a portal face for Barrick Nevada in the Cortez District.

that ideas for digitization projects come from Barrick Nevada employees. The projects “allowed the company to validate the viability of its digital solutions and their potential economic returns in a controlled environment with rigorous oversight,” the company stated in its year-end report, including a summary of digital efforts. One of the projects recently converted to digital includes automatically generating production reports and making them available in real time. Engineers previously created production reports weekly, and now they have more time to dedicate to other responsibilities. “Once the data is available in real time, we are going to act quicker,” Yalcin said. “We are going to make recommendations based on data to our people.” At AUOps, senior analyst Robert Bellman demonstrated another aspect of digitization. The analyst showed how

A worker sprays shotcrete onto what will be the third set of underground portals into Barrick Nevada’s Cortez District mining operations.


ELKO DAILY FREE PRESS, Elko, Nevada • 9

incidents related to safety, the environment or production are judged on an escalation metric that determines when something should be shared with an operator or the CEO. “It’s a mine-wide thing. We can look at the whole district,” Bellman said as he navigated among charts and messages on his computer screen at the back of a room filled with monitors. “This is so cool. It’s like driving a star ship.”

Shifting talents

Despite all the changes in mining techniques over the past 100-plus years in Northern Nevada – including at the Cortez District — people remain an essential part of operations. “We can’t run the digital transformation without people,” Yalcin said. “It’s just a matter of shifting the talent.” See Digital, 10

Juan Sandoval, operations supervisor at Barrick Nevada’s Cortez operation, uses digital technology in the mine operations center.

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Digital From 9

To help people adapt, Barrick offers its employees and their dependents free technology training through Cisco Net Academy at Great Basin College. The company has also been conducting sessions on the psychology of change to keep the workforce engaged, Fennemore said. “You need people to operate this equipment or analyze the data,” Yalcin said. “Data itself, without our data analysts, have no meaning. We need someone to make sense of it.” Making sense of data at the operations center at Cortez was operations supervisor Juan Sandoval. Among his tasks, he monitors the positions of workers and equipment on computer screens in an office outside the mine’s first underground portal.

A haul truck climbs a road within the Cortez Hills Open Pit. Material from Cortez Hills is transported 12 miles on a conveyor belt to the mill.

Systems for mapping and tracking, and an app for tablets and equipment increase the efficiency of the crews by about 5 percent, Fennemore said. “You actually get more work done,” Sandoval said, explaining how he can line out equipment from his office then send orders via tablets to workers ELKO, NV

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12 • MINING QUARTERLY, SPRING 2018

TOP STORY

Long Canyon marks productive first year in commercial production with better-than-expected production results and plans to start a second phase. Mining Quarterly editor “Production-wise, we exceeded The Long Canyon gold mine cel- our target,” said Gordon Mountford, ebrated completion of its first year general manager of Long Canyon, a STORY AND PHOTOS BY SUZANNE FEATHERSTON

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in November 2016. Identifying additional ore tons and seeing faster extraction on the leach pads has helped the Long Canyon team surpass its goals. The average reserve grade is 0.061 ounces per ton. “That’s helping our ore production exceed plan this year,” said Mountford, a mining engineer who has worked for Newmont for 25 years. “Things are looking actually really good.” Newmont broke ground on Long Canyon in April 2015, just 10 days after the Bureau of Land Management approved the mine’s record of decision. Through effective bargaining and engineering, Newmont completed the project for an initial investment of about $230 million — $63 million below the estimated investment, including $8 million in management reserve. The first ore landed on the heap leach in May 2016, although commercial production didn’t begin for another five months after the plant went online and enough ore covered the pad. The site, with a plan of operation boundary of more than 24,000 acres, includes almost 3,879 disturbed acres permitted. Facilities include

an administration building, truck shop with car wash, carbon-in-column building, heap leach and ponds. The run-ofmine operation employs about 240 people on-site and another 10 regionally. The fleet features 12 240-ton haul trucks, one loader and two shovels. Looking over the leach pads in January, process superintendent and 22-year Newmont employee Clayton Prothro pointed out how the pad is being filled in and preparations for expansion are in progress. The pad measures about 3 million square feet and is permitted to a height of 300 feet. “This gives you an idea of how big the pad is,” said Mountford, who explained that it will expand an additional 1 million square feet in 2018. “Now we have put the first lift in, and reclamation has started.” “And it is looking good,” Prothro responded. Newmont is performing ongoing reclamation, and about 20 acres have been reclaimed with soil, rocks and seed to emulate the natural landscape. “It’s not typical to see reclamation start the first year of mining,” Mountford said.

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gncu.org Above: Long Canyon General Manager Gordon Mountford waits to observe a surface blast while a haul truck drives above the site for plug dumps. Previous page: Two feet of soil, various rocks and native plant seeds cover about 20 acres of the Long Canyon’s waste dumps in an ongoing reclamation effort. Interstate 80 can be seen in the background.

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14 • MINING QUARTERLY, SPRING 2018

Long Canyon From 13

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A terraced blast explodes, followed by a sound like thunder, on cut four of the Long Canyon open pit mine in mid-January.

Ongoing reclamation is part of a plan to minimize the mine’s effect on the environment. Other components include painting buildings sage green to blend with the desert; using down-facing lights to preserve the dark night skies; conserving water; and using fences to prevent wildlife from entering the facility. Just as Mountford was describing how the mine dwells on a deer migration corridor, a herd of mule deer darted across the road. Staff has also observed elk, antelope, bobcats and a mountain lion nearby. Phase one of the mine takes processing through 2024, but the team submitted its phase two plan of operation to the BLM in September. It was deemed complete, and an environmental analysis has begun. If all goes well, final

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ELKO DAILY FREE PRESS, Elko, Nevada • 15

Long Canyon mine after just over one year in operation

permits could be in place by late 2020 to keep operations at a consistent rate. Phase two involves open pit expansion and the possibility of underground mining, Mountford said. Despite the progress, production and promising future, Mountford focused on another aspect of accomplishment for

Long Canyon. He said “our big success was safety,” as they had only one reportable minor injury all year. “The biggest reason why Long Canyon has been successful is the employees and the teamwork of each and every employee that contributed to that success,” Mountford said.

Long Canyon General Manager Gordon Mountford describes phase two of Long Canyon, which could include expansion and underground mining if approved. Phase two is in the environmental analysis stage.


16 • MINING QUARTERLY, SPRING 2018

TOP STORY

Premier plans Cove underground

Strikes agreements with Barrick, Kinross

Premier Gold Mines Ltd. recently completed a rapid infiltration basin at its Cove property south of Battle Mountain for treating water as the company plans to begin developing an underground gold mine. PHOTOS COURTESY PREMIER GOLD MINES INC.

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ELKO DAILY FREE PRESS, Elko, Nevada • 17

ADELLA HARDING Mining Quarterly correspondent

Premier Gold Mines Ltd. expects to begin underground development at its Cove deposit south of Battle Mountain yet this year, and the company has expanded exploration opportunities on the McCoy/Cove land package in an agreement with Barrick Gold Corp. The Canadian company that has an office in Reno also plans with Barrick to develop an underground mine at the South Arturo Mine near Barrick’s Goldstrike Mine north of Carlin along with new open pit development there. Premier additionally has an agreement with Kinross Gold Corp. for exploration at Premier’s Goldbanks property in Pershing County, and agreement with Barrick for its Rye Vein adjacent to Goldbanks.

“We see Nevada as a great place to be, and we are proud of the partnerships created,” said Charlie Ronkos, executive vice president of project development for the Americas for Premier. Current gold prices that have been in the range of $3,211 to $1,354 an ounce since the beginning of 2018 also are appealing to Premier, he said. Premier is an exploration and production company, with gold production from its 60-40 joint venture with Barrick at South Arturo, as well as operation of the Mercedes Mine in Mexico. At the Cove deposit at the McCoy/Cove Mine that was shut down years ago, Premier plans to revive mining with the underground operation at or near the old Cove Pit. Brent Kristof, senior vice president of operations for

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18 • MINING QUARTERLY, SPRING 2018

A water well is drilled at Premier Gold Mines Ltd. last summer in preparation for planned development of an underground mine at the company’s Cove property south of Battle Mountain.

Premier From 17

Premier, said the company is working through contracts, and “we intend in the second quarter to start development of the underground mine.”

He said the company expects to hire a contractor to start the portal and do the development work. The current permit is for up to 120,000 tons of ore during test mining, Kristof said. Premier wouldn’t be processing the ore, however. The ore is

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Carlin-style that will require roasting or an autoclave off-site. Premier reported in January that Barrick will process up to 120,000 tons of bulk-sampling refractory ore at a prearranged price as part of an agreement with Toronto-based Barrick. The processing agreement

“We see Nevada as a great place to be, and we are proud of the partnerships created.” — Charlie Ronkos, executive vice president of project development for the Americas, Premier Gold Mines Ltd.

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ELKO DAILY FREE PRESS, Elko, Nevada • 19

will provide certainty for the company to proceed with the underground development that will include construction of a ramp for definition drilling and potential test mining before a full feasibility study is completed, the company stated. “Premier is also evaluating life-of-mine processing opportunities with appropriate companies in the area should a new underground mine be built at Cove,” Kristof said. Ronkos said the permit for the underground project is for the portal to be in the pit, but the company is hoping to change the site of the portal to just outside the pit. Premier is completing dewatering wells for the site and constructed a rapid infiltration basin for water. Premier is the 100 percent owner of the site for the underground mine at Cove and will be the exploration operator for the area of McCoy/Cove that is

covered in an agreement with Barrick. The Cove open pit is roughly 10 miles south of Newmont Mining Corp.’s Phoenix copper and gold mine. “We drew blocks around Cove where we have current resources,” Ronkos said. Under the exploration agreement, Barrick has the option to earn a 60 percent interest in the property by spending $22.5 million in exploration over a fiveyear period. The arrangement calls for Barrick to spend $6 million of that in exploration prior to June 30, 2019, with Premier as operator. Barrick would become the operator after spending the additional $16.5 million by June 30, 2022. Premier stated that exploration on the joint venture property was expected to begin early this year, including surface mapping and sampling followed by drilling. The property in the agreement covers roughly 50

Barrick Gold Corp. and Premier Gold Mines Ltd. are planning an underground mine at South Arturo Mine near Barrick’s Goldstrike Mine north of Carlin. This photograph from Premier shows Phase II mining in the South Arturo pit before mining since stopped until another phase gets underway about mid-year. Barrick is 60 percent owner and operator at South Arturo, while Premier holds the remaining 40 percent.

square miles. Barrick is the operator and 60 percent owner, however, of South Arturo, which is producing gold only from stockpiles until work can begin on the El Niño underground and the next phase of the open pit. Ore is processed at Goldstrike. Premier reported its 40

percent share of gold production totaled 57,124 ounces in 2017, with only 4,472 ounces produced in the fourth quarter of the year. Mining ended on phase II of the South Arturo Pit, and the portals for the underground mine will be in the mined-out Phase II See Premier, 20

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area. Barrick is “evaluating the best approach” to the underground mining, whether to hire a contractor or use its own crews, Kristof said. Delineation drilling and setup of facilities at the portals will be done later this year, he said. “Phase II just finished being backfilled to the elevation where the portals will go,” Kristof said. Surface mining will be in Phase I of the South Arturo Pit, and this is in the current lifeof-mine plan, while Phase III is under evaluation, he said. Stripping of waste material for Phase I will start about mid-year, but there will be little mining of gold ore until 2019. Exploration drilling continues at South Arturo as well, according to Premier. Premier acquired the 40

percent share of South Arturo in 2014 from Goldcorp Inc. South Arturo is “just an extension of the Dee Mine” that was in operation earlier, Ronkos said. Premier and Barrick also have an exploration agreement for the Rye Vein, which is Barrick property. The site “wasn’t high on their priority list so we talked to them and worked out a deal so we can explore there,” Ronkos said. Premier will have the option to acquire 100 percent interest in the Rye Vein site by spending $3 million in exploration before Dec. 31, 2019. Barrick will retain a 1 percent net smelter return royalty on Rye, where there is no existing royalty. Barrick also will have a back-in right to purchase 51 percent interest in Rye, canceling the royalty. At Goldbanks, there is an existing open-pit resource, but “it was never good enough to get over the hurdle,” Ronkos said, adding that now there are more

targets that “may get us over the hurdle.” Goldbanks and Rye Vein are in the same area, so Premier “consolidated a big part of the district,” Ronkos said. The site 35 miles south of Winnemucca covers 18,184 acres. The consolidation included agreements and acquisitions with Barrick, Kinross Gold, Nevada Sunrise and Kurt Schendel, according to Premier. The company has an option to acquire a 50 percent interest in Goldbanks from Kinross. Premier reported full-year 2017 gold production of 139,658 ounces and production of 357,901 ounces of silver from South Arturo and Mercedes combined, and the forecast for 2018 is gold production of 85,000 to 95,000 ounces of gold and 300,000-325,000 ounces of silver. The company, with headquarters at Thunder Bay, Ontario, produced 82,534 ounces of gold

at Mercedes in Sonora, Mexico, in 2017. Kristof said the mine has roughly 440 employees, and there are a similar number of part-time and full-time contractors. Headquarters has about 15 employees, as does the Reno office, Kristof said. Premier also is involved with the Greenstone Gold joint venture in Ontario with Centerra Gold and is drilling on the Hasaga Property in Ontario. The company has a $38.8 million budget this year for exploration and development, and Barrick will spend the additional $6 million of its money at the McCoy-Cove joint venture exploration site. The company’s chief executive officer and president, Ewan Downie, stated in the company’s release on production and projects that the development projects will be financed entirely from the company’s treasury and cash flow.

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ELKO DAILY FREE PRESS, Elko, Nevada • 21

EPA’s Pruitt visits Coeur Preaches stewardship over prohibition STORY AND PHOTOS BY SUZANNE FEATHERSTON Mining Quarterly editor‌

‌An agency that encourages stewardship over prohibition is the Environmental Protection Agency that Administrator Scott Pruitt represented to the Nevada mining industry on Feb. 5. The presidential cabinet member visited Coeur Mining Inc.’s Rochester mine near Lovelock to discuss the agency’s December decision not to issue final regulations for financial responsibility requirements for Gov. Brian Sandoval, left, and Scott Pruitt, administrator of the U.S. Environmental Protection Agency, meet Coeur Mining Inc. shovel operator Jenny Havens at the Rochester mine near Lovelock.

See Pruitt, Page 22

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certain hardrock mining operations. “What is environmental stewardship? What is environmental protection?” Pruitt asked. “I think as we work together over the next several years, we need to get back to stewardship, not prohibition.” The EPA decided not to issue the final rules under the Comprehensive Environmental Response, Compensation and Liability Act — CERCLA or Superfund — “because the risks associated with these facilities’ operations are addressed by existing federal and state programs and industry practices,” according to an EPA statement. The rules regarding mine reclamation would have affected 45 facilities across Nevada, he said, and many more across

U.S. Environmental Protection Agency Administrator Scott Pruitt, center, tours Coeur Mining Inc.’s Rochester mine during a visit Feb. 5 to discuss the recent EPA decision not to impose additional financial assurances for reclamation on certain hardrock mines.

the country. addressed some of Coeur Roch- were Nevada officials, including After a tour of the silver- ester’s 300 employees in the Gov. Brian Sandoval, Nevada and-gold open pit mine, Pruitt truck shop. Also in attendance Mining Association President

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“The agency that I’ve been selected to lead, the last several years has been weaponized. It’s been weaponized against certain sectors of our economy, and yours was one of them.” — EPA Administrator Scott Pruitt

Dana Bennett, Bureau of Land Management’s Nevada Director John Ruhs, and industry experts. “The agency that I’ve been selected to lead, the last several years has been weaponized. It’s been weaponized against certain sectors of our economy, and yours was one of them,” Pruitt said. “Think about that for a second. An agency in Washington, D.C., weaponized against its own sectors of the economy across this country. That’s not the way it should work.” Sandoval reminded listeners that Nevada already has policies in place to ensure good stewardship of the environment. He echoed the administrator’s statement that additional regulations would have placed undue burden on the mining industry and economy of rural Nevada. “Nevada’s our house,” Sandoval said. “We’re proud of it, and we take good care of it.” D u r i n g a seve n - m o n t h EPA public comment period in 2017 before the decision, Sandoval joined governors from across the country in declaring additional financial assurances for mine reclamation redundant, a point he revisited during the event. “In our state, there are requirements that have been in place since 1991,” Sandoval said, explaining that Nevada requires $2.7 billion in bonding for 167,000 acres. “I’m really proud of our regulatory system. It serves as a national model.” Pruitt said he aims to help restore cooperative partnerships between the states and the federal government to be

good stewards of the environment. What he described as a “commonsense” approach acknowledges that states have financial assurances already in place and that the proposed policy was not cost-effective for taxpayers. He said the decision reflects the direction of President Donald Trump to “put America first.” “We recognized that you in Nevada recognize that you care about the air that you breathe, the water you drink and how you take care of your land in the state,” Pruitt said. “Having a rule that was punitive, weaponized against the mining sector, was not a reason to have the rule, so we stopped the rule.” The administrator and governor stressed that the result of not requiring additional financial assurances should stimulate the economy, as mining companies invest in jobs and expand operations. “This truly is something we should all celebrate because it does reverberate to all of you, because we don’t have to do this redundant bonding. That allows the mine to continue to invest in all of you,” Sandoval said. “It allows you to go beyond and expand the mine to have that mine life so that all of you can have this continuous employment.” Pruitt also announced that EPA staff members are examining their processes for approving permits, which sometimes take 20 years to approve. He said they plan to streamline processes so that EPA-approved environmental permits can be decided in six months, starting in late 2018.

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24 • MINING QUARTERLY, SPRING 2018

Anaconda fate in state, private hands EPA grants deferral of priority listing SUZANNE FEATHERSTON Mining Quarterly editor‌

SUZANNE FEATHERSTON‌

Nevada Gov. Brian Sandoval signs a deferral agreement to keep the Anaconda Copper Mine from going on the Superfund National Priorities List as U.S. Environmental Protection Agency Administrator Scott Pruitt looks on. The two signed the agreement Feb. 5 at the site near Yerington.

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‌The Anaconda Copper Mine averted being listed as a Superfund national priority site as state and federal government representatives signed an agreement Feb. 5 to ensure cleanup in cooperation with site owner Atlantic Richfield Co. U.S. Environmental Protection Administrator Scott Pruitt said the plan is an example of the agency’s focus on getting results under the Trump Administration, and proponents of the deferral say the alternate plan will accelerate remediation and save taxpayers millions of dollars.

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“We need to be focused on real results, getting real answers, and making sure that we are focused on that and that our processes internally get to that. That’s what this site represents at Anaconda,” Pruitt said. “This is [EPA] Region 9 headquarters, the state of Nevada [and] various stakeholders coming together to say that there is a path forward that provides certainty to the community — that gets this area cleaned up, protects the health of the environment, and we can do it in a time frame that is expeditious.” Pruitt and Gov. Brian Sandoval met at the 100-year-old former mine to make the announcement and sign the deferral agreement. Local officials, state regulatory agency representatives and industry experts attended the event near Yerington. Lyon County Board of Commissioners Chairman Bob Hastings, Commissioner Greg

Hunewill, Nevada Assemblyman Jim Wheeler, Assemblywoman Robin Titus, Nevada Sen. James Settelmeyer, Yerington Mayor George Dini, Walker River Paiute Tribe chairwoman Amber Torres and Nevada Mining Association President Dana Bennett were among the guests in attendance. “This is a landmark day for all of us because it is going to provide that certainty that everybody needs, but most importantly, this is going to get cleaned up,” said Sandoval. “For the people that I know who live in this community, this is a lifechanger.” The open pit and heap leach copper mine operated intermittently between 1918 and 2000 under various owners but was plagued by environmental concerns, including alleged water pollution. After the Anaconda Copper Mine was abandoned in 2000, state and federal

environmental agencies commenced activities to stabilize and regulate the site while engaging in a years-long discussion with concerned parties. “One of the things that’s important to recognize is what this means for us as a community,” said Lyon County Manager Jeff Page. “We’re finally going to be able to have — after two decades of struggling, doing testing, research, debating, arguing — we’re finally going to be at a point in time where we can start moving forward and getting things cleaned up like we wanted to get done to begin with, and at a substantially reduced expense to the local taxpayers as well as the rest of us.” While under the Obama Administration, the EPA proposed adding the mine — a Superfund site since 2005 — to the Superfund National Priorities List to make it eligible for federal

remediation funds, according to an EPA press release. The national priority listing would have put the project under federal control and used federal funds for remediation. In the U.S., there are more than 1,300 Superfund sites, or hazardous-waste-contaminated lands identified as candidates for cleanup, according to the EPA. Instead, Atlantic Richfield Co., the site owner and wholly owned subsidiary of BP, approached the state with a proposal for remediation through government and private cooperation. In July 2017, Nevada leaders requested the EPA defer the NPL listing of areas not on tribal lands. “We wondered if there was another way to advance the site more effectively, without the stigma of a Superfund See Anaconda, 26

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designation,” said Robert Genovese, president of Atlantic Richfield Co. Since then, Sandoval, the EPA, Nevada Division of Environmental Protection, the tribes and others have worked together to complete the necessary agreements to defer listing. The effort includes Atlantic Richfield taking on the “orphan shares,” or environmental issues of previous companies that no longer exist. “As you look around, you undoubtedly will have noticed this is a massive site. Remediation here will be an enormous undertaking,” Genovese said from a lectern set up behind the secure fencing on the 3,400acre site, which includes heap leach pads, evaporation ponds, tailings, buildings, process areas,

waste rock and a pit lake. “We are here to remediate the environmental impact of decades of mining activities so that the community can move forward.” Genovese said the EPA’s decision to allow deferral saves taxpayers about $40 million “by not requiring federal funding to clean up environmental impacts created by other companies that are no longer in business.” He did not disclose the cost of the project. The cleanup plan takes on a holistic approach that Genovese described as protective and efficient, to be accomplished in phases. Anticipated closure is set for 2029, according to a timeline provided at the event. The EPA determined that Nevada meets the applicable criteria for deferral, according to the release. Under deferral, mine cleanup must meet the same level of protection as if it were a Superfund priority site.

SUZANNE FEATHERSTON

Above Yerington, a mile-long open pit remains at the defunct Anaconda Copper Mine as shown in this 2017 file photo.

The agency plans to review remedies and progress, and retains responsibility for tribal land. “There is monitoring that occurs,” Pruitt said. “It’s a partnership.” The EPA administrator, a member of President Donald Trump’s cabinet, said the agency’s action at Anaconda represents the president’s results-oriented leadership style. “He wants us to use our

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authority, take our responsibilities to the point of getting answers for communities all over this country. When you think about it, sites like Anaconda are some of the most tangible benefits we can provide citizens across the country,” Pruitt said. “So this is really good work and this is really what the agency does well, and I know [that by] working with the state of Nevada, it will be achieved.”

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Safety drives truck shop

ELKO DAILY FREE PRESS, Elko, Nevada • 27

ABOVE:vv Platforms that raise workers to the level of their tasks around heavy equipment improve safety, explains Newmont Mining Corp. maintenance supervisor Pete Chavez at the Carlin operations. BELOW: Newmont employee Robert Brinkerhoff shows the ultrasonic detector he uses to check heavy equipment cabs and engine compartments for air leaks.

Newmont ops adhere to FRM program STORY AND PHOTOS BY SUZANNE FEATHERSTON Mining Quarterly editor‌

‌W hile preventative maintenance helps ensure the long life of heavy equipment at Newmont Mining Corp.’s Carlin operations, a companywide safety program helps ensure the lifelong well-being of employees. “Safety is a value, and it drives our decisions,” said Steve Johnson, Newmont surface manager. At the heavy equipment shop in the south area of the Carlin operations one January morning, a Newmont leadership team checks a magnetized dry erase board where workers have identified the risks associated with the day’s tasks. The board is part of the company’s newly implemented Fatality Risk Management program.

“It’s their job to come in and identify whatever fatality risk is related to the assigned task of the day,” said Pete Chavez, Newmont maintenance supervisor, who explains that the program engages hourly employees. “They basically drive this piece.” Employees must select yellow vtriangle-shaped magnets that depict the appropriate symbols for the potential perils in the assigned work then place the icons on a grid that correlates the location, asset, task, workers and time. In the field, employees must do an assessment, referring to a pocket guide to confirm the appropriate safeguards are in place before beginning work. “An employee has every right to shut down a job if they don’t feel safe,” said Jaymie Donovan, Newmont external relations representative. For a mechanic fixing the parking brake on a haul truck, that means See FRM, 28


28 • MINING QUARTERLY, SPRING 2018

FRM From 27

re cog n i z i n g t h a t t h e jo b presents risks, such as contact with electricity and entanglement with rotating equipment. Chocking wheels and locking out machinery are some of the critical controls that must be implemented on the shop floor. I n t h e s h o p, New m o n t safety manager Tim Burns and Chavez show how FRM looks in action. Scaffolding-like platforms surround the house-sized Caterpillar 793D haul trucks in for regularly scheduled maintenance. The infrastructure improves safety around jobs such as changing filters, fixing mirrors and detecting leaks in the cab and around the engine. Equipment is put on jack stands, immobilized with wheel chocks and

Jeff Young recently joined Newmont Mining Corp. as a shift superintendent at the Carlin operations.

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ELKO DAILY FREE PRESS, Elko, Nevada • 29

Newmont Mining Corp. safety manager Tim Burns points out critical controls around a job at the Carlin operations heavy equipment shop.

than I do,” Burns said. Still it is Burns’ and other supervisors’ job to verify the assessments and controls are in place. He said he conducts 176 planned verifications in the north and south areas of the Carlin operation every month. Just because a task is safely completed once does not mean it will be successful the next time. “Safety doesn’t work that way,” Burns said. “In fact,

most things don’t.” FRM goes beyond those in the heavy equipment shop to all of the approximately 2,000 employees at the Carlin operations — and more around the globe — for any task. Newmont introduced FRM last year as part of its safety culture. FRM is one of the systems in place that contributes toward the goal of zero harm. “It’s not the only thing that we do. It’s one piece of our program,” Burns said. “It’s a pretty dynamic process.” With success through preventative maintenance for equipment, Newmont might be able to get about 100,000 hours of run time out of a haul truck. By following the FRM program, the company aims to have an employee enjoy a healthy and safe longJaymie Donovan, external relations representative for Newmont Mining term career — and long and Corp., wears a “Fun Meter” set to “Max” during a tour of the heavy equiphealthy life. ment shop at the Carlin operations.

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TOP STORY

A new lease on NV oil?

Interest in Rubies sparks environmental process STORY AND PHOTOS BY SUZANNE FEATHERSTON Mining Quarterly editor‌

‌A yellow-brown oil sample from the Elko Formation near Jiggs congeals in a quart-sized canning jar in the office of Thomas Schmidt, Bureau of Land Management geologist for the Tuscarora field office. The substance emerged from Nevada oil shale deep in the ground at about 153 degrees in 2015 looking like a beer — yellow

“Nevada doesn’t have a lot of oil targets because our state geology has a very high heat flux. It’s in the basin and range. It’s faulted. There is a lot of geothermal here because the crust is relatively shallow.”

— Rich Perry, administrator, Nevada Division of Minerals

and frothy. Now cool and turning butterscotch brown, the oil looks more like petroleum jelly and smells about the same, with a tinge of acrid asphalt. “It’s more like shoe polish,” Schmidt said. He unscrewed the lid and blended a touch onto his knuckles. The product he saved came from Huntington Valley near

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Jiggs when a Houston-based oil company extracted 3,831 barrels of oil in 2014 and 2015, according to the Nevada Division of Minerals. Noble Energy elected to discontinue exploration in northeastern Nevada after assessing the commercial viability in the commodity environment, the company states in its 2015 annual report.

The wells were plugged and abandoned in early 2017 as the leases on public land expired, Schmidt explained. Since Noble Energy’s exploration, no new entity has developed oil operations in Nevada, although there has been exploration and a handful of companies have been producing oil in some of the state’s 10 oilfields, primarily in Nye county, for years, according to the Nevada Division of Minerals and Nevada Bureau of Mines and Geology. Oil has been produced in Nevada since 1954, making more than 53 million barrels by 2016, the division reports,

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and exploration dates to 1908; five producers operated in the state in 2017. For comparison, oil production in Texas totaled more than 73 million barrels in November 2016, according to the Railroad Commission of Texas. “Most of the oil in Nevada that has been produced in Nevada has been heavy asphaltic crude,” said Rich Perry, administrator of the Nevada Division of Minerals, who described Nevada as a “frontier state” when it comes to oil.

the Ruby Mountains. As the manager of subsurface minerals in public land, the BLM has the authority to lease land for oil and gas once a quarter. Companies or individuals can request that parcels of land be made available for lease through an expression of interest. This happened in April 2017 when the state BLM office received an email request from an individual who is identified in documents as Ethan Murray of Murray Land Service. He requested that about 54,000 acres in Elko and White Pine counties — south of Lamoille Interest A recent expression of inter- Creek and north of Sherman est, however, for an oil and gas Creek on the west side of the lease on public land near Elko Ruby Mountains — be made has the community wondering how oil production would affect See Oil, 33 Thomas Schmidt, Bureau of Land Management geologist for the Tuscarora field office, shows a sample of the first production in about 2015 from an oil well near Jiggs.

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Only ruins of the Catlin Shale Products Co. remain at the site of Elko County’s 1920s-era experimental oil-from-shale operation, which sparked interest in oil production in northeastern Nevada that continues today.

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Oil From 31

available for lease. Murray did not respond to a request for an interview. “Someone sent in an expression of interest, an EOI, to the Department of Interior, listing these sections and townships. Anybody can do that,” said Perry, who explained that the process does not require any type of fee, like staking a mining claim does. “That triggers a process by which they have to look at and do an environmental assessment on, ‘Should this go into a BLM competitive quarterly lease?’” Because the land is under the jurisdiction of the National Forest Service, the state BLM office must receive an environmental assessment from the Forest Service regarding the land in

Elko County. The analysis seeks to determine if the lands can be made available administratively, and what stipulations would be included to protect surface resources. “We are the surface managers,” said Jenna Padilla, northeast zone geologist for the Humboldt-Toiyabe National Forest. Surface resources include wildlife such as sage-grouse, trees, recreation, cultural resources, watersheds, rare plants, steep slopes and more. Stipulations could range from “no” to the lease altogether to imposing restrictions such as no surface occupancy, controlled surface use and timing limitations. “Right now, we are doing the environmental analysis just for the leasing alone,” Padilla said. “There isn’t any ground disturbance that would be authorized through this environmental

assessment.” Completing an environmental analysis included a public scoping comment period that ended Nov. 2 and garnered approximately 8,200 public comments. Input came from individuals, Western Shoshone tribes, and organizations, such as the Center for Biological Diversity and sportspeople groups, including Trout Unlimited. Groups that have submitted written comments in opposition to the proposal are the Theodore Roosevelt Conservation Partnership, Backcountry Hunters and Anglers, Nevada Muleys, and the Nevada Wildlife Coalition. “There were comments received in support, but it was a very small number compared to all the comments in opposition,” Padilla said, explaining that the submissions included a combination of individual letters and

form letters. “Even in the unique letters, there was a strong voice of opposition.” Forest Service staff members, including Padilla and Clarke Douglas, planner for the Humboldt-Toiyabe National Forest, are reviewing the comments, which will be considered in the overall analysis. The team expects the analysis to be completed sometime in early spring, Padilla estimated, when a draft decision notice will be published. After a public objection period and further review, the Forest Service ranger will make a determination that the state BLM would use to decide whether to put the land up for lease. If the land is leased and a company wants to drill, the interested party must go through another environmental See Oil, 34

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34 • MINING QUARTERLY, SPRING 2018

Oil

“I know of no targets for oil in the Rubies. It’s a metamorphic ore complex. There’s no sedimentary rock that would contain oil.”

From 33

analysis process. The last time the BLM requested that the Forest Service complete an analysis was in 2006, Padilla said. An analysis was completed, but no action was taken. If the parcels were on BLM land only and not Forest Service land, then the BLM would handle the analysis using a similar process.

Geology

The idea of oil in the Ruby Mountains has Perry scratching his head, as the state’s geology makes the likelihood of finding oil on the Rubies practically nil. “I have no idea why this individual nominated these pieces of ground in the Rubies,” Perry said. “I know of no targets for

— Rich Perry, administrator, Nevada Division of Minerals

oil in the Rubies. It’s a metamorphic ore complex. There’s no sedimentary rock that would contain oil.” Oil and gas occur because organics that died in oceans thermally matured and were deposited, Perry explained. Those oil deposits — in conventional or unconventional form — typically fall in basins in reservoirs that are structurally controlled. Conventionally, oil and gas flows freely through permeable rock, such as some sedimentary rocks, and is under pressure. Drilling pierces or intersects the oil or gas-bearing layer then pressure in the formation pushes the oil or gas up a pipe

to be pumped out. Most oil production in Nevada has been conventional, and the state never has had commercial natural gas production, Perry said. In an unconventional target, oil or gas exists in low-permeability shales but cannot move freely. Extraction requires a mechanism, such as hydraulic fracturing, to create permeability in the rock. “Fracking” adds components such fluid and sand to the ground to create the right conditions to mobilize the oil. The Noble Energy oil sample, light high paraffin crude oil from Huntington Valley in Elko County, came from a well that was hydraulically fractured under policies that Perry called

the most stringent in the country. Five wells have been hydraulically fractured in Nevada: three in Elko County and one each in Nye and Eureka counties, according to the Nevada Division of Minerals. Another geological factor works against oil deposits in the state: geothermal activity. “Nevada doesn’t have a lot of oil targets because our state geology has a very high heat flux. It’s in the basin and range. It’s faulted. There is a lot of geothermal here because the crust is relatively shallow,” Perry said. He explained that the presence of natural heat means that much of the state’s oil “was cooked off millions of years ago to some extent,” and that carbonaceous ore found in the bottom of pits might have been oil at some point. See Oil, 36

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36 • MINING QUARTERLY, SPRING 2018

Oil From 34

Economics

The process of extracting the oil that does exist in Nevada is difficult and expensive, said Greg Deimel, public affairs officer for the BLM Elko District office. Most of the operations are concentrated in areas that have infrastructure already in place, such as Pine Valley in Eureka County and Railroad Valley in Nye County. Oil is sent to Nevada’s one refinery, in Nye County, where it is made into asphalt tiles for roofs, asphalt for roads and some diesel. “Other targets that are more distant from [infrastructure] will require a much higher oil price to get companies interested in exploring,” Perry said. The same economic principles applied to one of Nevada’s

earliest oil production experiments. Before the invention of hydraulic fracturing, geologist Robert Catlin operated Catlin Shale Products Co. starting in 1917, producing oil from shale near Elko and investing more than $1 million. Catlin used a heating process called retorting to extract oil — mostly gasoline and various lubricants — from the rock, producing about 15,000 gallons by 1919, according to Elko Daily Free Press archives. In Elko, a barrel of Catlin Hi-Powered oil cost $5 per gallon, which is the equivalent of about $70 per gallon today. The product was tested in engines, but the oil congealed at cold temperatures. The plant shut down in 1924 because production costs totaled more than sales. Today, all that remains of the site are graffiti-ridden ruins of the former refractory. Papery layers of

Shale rocks in the Elko Formation, such as these sheets at the former Catlin Shale Products Co. workings of the 1920s south of Elko, were once at the bottom of ancient lakes. Some specimens contain enough oil that the rock can be set on fire.

tan-to-black shale that once lined an ancient lake now protrude from the hill above at angles directed by tectonics. However, Catlin’s experiment near Elko influenced the development of oil-from-shale

technology and sparked an interest in oil production in northeastern Nevada that continues to this day. “That is what started the whole interest in oil in this area,” Schmidt said.


SPRING 2018 ELKO DAILY FREE PRESS, Elko, Nevada • 37

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38 • MINING QUARTERLY, SPRING 2018

SUBMITTED‌

McGinness Hills Geothermal Facility near Austin, Nevada

GEOTHERMAL

Ormat to expand Austin geothermal SUZANNE FEATHERSTON Mining Quarterly editor‌

‌An expansion underway at the McGinness Hills Geothermal Facility near Austin will make the Ormat Technologies Inc. complex the largest geothermal power generating facility in the state, and the largest located on Bureau of Land Management property. The Bureau of Land

Management, Mount Lewis Field Office, completed its analysis of Ormat Inc.’s proposal for an expansion to its McGinness Hills Geothermal Facility on Jan. 18. The decision of record allows operations to begin at the Phase III project site, and construction is expected to be completed in December 2018. The expansion “demonstrates Ormat’s commitment to growing its global renewable

p o r t fo l i o by d e l ive r i n g cost-effective, firm and flexible geothermal projects that are coveted for their ability to maintain a reliable power supply,” said Paul Thomsen, executive director, government and regulatory affairs, for Ormat Technologies. “The MGH expansion will be the largest expansion completed by Ormat and will utilize our proven proprietary technology,

and our capabilities as a vertically integrated company to develop a geothermal project from start to finish.”

Expansion

Phase III expansion will consist of access roads, a pipeline, a power plant, wells and transmission line. Total new disturbance for this expansion is estimated at 42 acres, as the majority of work will be completed on


ELKO DAILY FREE PRESS, Elko, Nevada • 39

the previously analyzed Phase I and Phase II footprint. Commercial production at the McGinness Hills Geothermal facility began in July 2012, and Ormat completed a second phase in 2015. The first two phases gave the complex a generating capacity of 86 megawatts, and power from phases I and II feeds the Nevada Energy grid. Once Phase III is completed, generating capacity is expected to increase to 134 MW. Phase III will contribute power to the Southern California Public Power Authority. After the completion of Phase III, McGinness Hills will include 15 production wells at about 2,000-3,600 feet deep producing water at temperatures ranging from 330-337 degrees. The site will contain eight Ormat Energy Converters and seven injection wells. One hundred

percent of the geothermal fluid accordance with BLM priorities, is reinjected into the reservoir. including making America safe through energy independence, Environment getting America back to work The final environmental and shared conservation,” assessment, announced Jan. 18, said District Manager Douglas included extensive coordina- Furtado. “The Battle Mountain tion with the Nevada Depart- District has a heavy focus on ment of Wildlife, as well as the the responsible development U.S. Fish and Wildlife Service, of energy and mineral projects. U.S. Geological Survey, tribal governments and other inter- Economics ested parties. T h e co m pa ny ’s ca p i ta l A l t e r n a t i v e s i n t h e investment for all three phase environmental assessment is estimated to total about examined the expansion’s range $600 million. of potential issues such as air “This geothermal expansion quality, cultural resources, will increase the clean energy wildlife and wildlife habitat, capacity within Nevada, create Native American religious new jobs and stimulate the local concerns, threatened and economy and energy market,” endangered species, minerals, Furtado said. noise, grazing management, Over the next 20 years, the access and land use, and social entire complex is expected to and economic values. contribute $35 million in prop“ T h i s d e c i s i o n i s i n erty and use taxes and $60

million in federal royalties, with $30 million going to the State of Nevada, $15 million going to Lander County, and $15 million going to the federal treasury, according to an Ormat statement. Additionally, total construction of the third phase will impact the Nevada economy and will employ Nevada residents through construction and permanent employment. O r m a t , h e a d q u a r te re d i n Re n o s i n ce 19 8 4, h a s developed 11 power plants in Nevada and operates 15 power plants, providing 270 MW of net generating capacity. The company has installed more than 2,500 megawatts of geothermal and recovered e n e rg y ge n e ra t i o n p owe r plants around the world in 30 countries, and employs 1,300 people worldwide.

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40 • MINING QUARTERLY, SPRING 2018

TOP STORY

McEwen builds Gold Bar Eureka mine to begin operations 2018, create jobs

STORY AND PHOTOS BY SUZANNE FEATHERSTON Mining Quarterly editor

Above: Frank Sanchez, earthworks owner’s representative for McEwen Mining Inc., shows plans for the Gold Bar Project near Eureka, a recently approved greenfield open pit mine in development as of Nov. 7. Top: Simon Quick, McEwen Mining Inc. vice president of projects, takes in the view from the Southern Roberts Mountains over the future leach pads at the Gold Bar Project in early December.

Earthwork at a Eureka County gold mine continues into the winter season as McEwen Mining Inc. builds one of Nevada’s newest greenfield open pit heap leach operations. “It’s a great experience to be involved all the way along a project, to be able to participate on the permitting side the environmental work that needs to be done to get a project improved,”

said Jeff Snyder, Gold Bar general manager. The company, operating as the subsidiary McEwen Mining Nevada Inc., began construction of the Gold Bar Project on the Battle Mountain-Eureka-Cortez Trend in the fourth quarter after the Bureau of Land Management approved the mine’s proposed action by signing the record of decision Nov. 7. “We’ve been lucky,” said Simon Quick, McEwen Mining’s vice president of projects. “We didn’t expect to work this far into the season.” Developing the mine — at a total capital cost of $80 million — involves a process


ELKO DAILY FREE PRESS, Elko, Nevada • 41

with a timeline dependent on north-central Nevada’s weather. In early December, contractors Highmark Construction, Brahma Group Inc. and N.A. Degerstrom were taking advantage of the cold yet dry conditions to clear the land and prepare the site. “Our contractors are just part of our team,” said Ron Jensen, McEwen Mining safety manager, who described the company’s attitude toward safety as encompassing everyone who sets foot on the site. The plan is to build out the leach pad in spring after a thaw, install mechanics and equipment in summer and begin operation in late 2018. Electricity will be generated on-site using natural gas to meet the 2-megawatt demand, and water will come from wells drilled with permission on the private land of a

historic ranch. Once in production, Gold Bar is expected to produce about 65,000 ounces of gold a year — 8,000 tons of ore a day — for a seven-year mine life. Design for the site on mostly BLM and some private lands, calls for four open pits. Two pits already exist from former workings, developed between 1988 and 1994. The resource totals about 500,000 ounces. As with a typical heap leach operation, Gold Bar will use cyanide to extract the gold. However, the makeup of the host rock presents a challenge that requires an additional step. “The clay content of the ore requires an agglomerate process to ensure we have good permeability on the leach pad,” said Jeff See Gold Bar, 42

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Ground work continues late in the season at the Gold Bar Project site as weather remains favorable. McEwen Mining Inc. is developing the open pit mine, its first U.S. operation.

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42 • MINING QUARTERLY, SPRING 2018

Gold Bar From 41

Gibby, Gold Bar project manager. After blasting in the pits and scooping up the ore with loaders into haul trucks, the material will be sent to a crusher then delivered on a conveyer to an agglomerate drum. The 10-foot diameter, 60-foot drum adds solution and cement, and a tumbling action creates rocklike particles. Now like concrete balls, the particles go to the leach pad, where the cyanide solution flows over them. “The agglomeration step is something that historically mines used to do, and it kind of grew out of favor with the advent of larger mining operations moving toward run-of-mine. [At] larger operations, you can make up for losses in lower recovery with volume,” Snyder said. “By

putting in the agglomeration step and making sure you bind the clays, you get a much better opportunity for recovery once you put it on the leach pad.” Industry standards suggest that the process of extracting gold from when cyanide is applied typically takes 90 days to obtain 65-75 percent of the gold. At Gold Bar, the so-called leach kinetics take 60 days to recover 80 percent. “The great advantage is that the leach kinetics are comparatively rapid,” Snyder said. The chemistry of the site might thrill scientists and investors, but earthworks owner representative Frank Sanchez had another view. “The exciting part for me is starting a new project,” he said, reflecting on a full career of mining all over the world. In early December, Sanchez drove to the top of a more than

The Gold Bar Project site in Eureka County incorporates the haul road of a former mine from the early 1990s. McEwen Mining Inc. began developing the mine in November.

8,000-foot mountain on a winding, juniper-lined mine road. Turning to look over the process area about 1,500 feet below and the distant valley, Sanchez shared the landscape he admires at sunrise almost every morning. “We have the best view in the county,” Sanchez said. “Now tell me that isn’t a great view.” McEwen Mining operates mines in Mexico and Argentina, and recently acquired the

producing Black Fox Project in Timmins, Canada, as a capital investment. Gold Bar is the company’s only site now in development and is the company’s only U.S. operation. McEwen Mining is incorporated in Colorado but headquartered in Canada. “Gold Bar is starting from nothing both on the buildup side and the staff side,” Quick said, explaining that presents an opportunity to create a beneficial

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culture among members of a close team. Once in operation, the mine is expected to create about 120 fulltime jobs, including contractors. Quick estimated that McEwen will employs about 150 people during peak of construction through next year. The company contracted M3 Engineering & Technology Corp. out of Arizona and NewFields based in Colorado with an office in Elko for engineering work. “What we have been trying to do philosophically is try to employ as many locals as possible,” Quick said. Eureka residents would have an approximately 30-mile drive northwest to reach the mine off of Highway 50. From the highway, the previous operation can be seen on the Southern Roberts Mountains, but McEwen Mining’s environmental approach includes plans to minimize Gold Bar’s presence and impact, and reclaim the lands including the former mine. The company has about $15 million in an adjudicated bond for reclamation. “We live here,” Snyder said. “We have as big a stake in preserving the environment as anyone does.”

The mine will use paint on buildings that blends into the landscape and lights that do not interfere with the desert’s dark skies. Additional environmental considerations include proponent-driven mitigation, carpooling and drive-time restrictions to reduce risk to sage-grouse; fencing to keep wildlife out; “bird balls” on ponds keep birds from the water; and using removed and burned pinion junipers in continuous mitigation. “It’s those little things that matter,” Quick said. Forming relationships with the locals also matters, and the company strives to maintain a presence in the community by keeping a Eureka office and getting involved with local events, such as the Christmas parade. Additionally, the county maintains Roberts Creek and Three Bars roads that lead to the mine, and the county assistance preserves local employment. “We are visitors to their town,” Quick said. “It’s important to take that into consideration in how you operate your business.” If construction progress continues into the winter and stays on schedule for next year, Gold Bar might celebrate its first gold pour in the first quarter of 2019.

The former open pit workings at the Gold Bar Project, in development by McEwen Mining Inc. as of November, show yellowish oxidized and gray carbonaceous materials in what crews call the “Halloween” workings.


44 • MINING QUARTERLY, SPRING 2018

COMMUNITY

Barrick pledges

$100K Endowment fund to sustain community

SUZANNE FEATHERSTON Mining Quarterly editor‌

Elko County Community Foundation Advisory Council member Lauren Landa, NAMI representatives Lea Bastin and Flora Boyer, LASSO representative and Elko Animal Shelter Manager Karen Walther, and Community FAC member Kerry Aguirre

‌To invest in the future of Elko County, Barrick Gold Corp. committed to donating $100,000 to the Community Foundation of Elko County fund at the nonprofit’s second annual meeting Jan. 4 at the Western Folklife Center. “It’s a real honor for Barrick to take the lead on this,” said Katie Neddenriep, Barrick’s corporate social responsibility manager, who serves as chair of the fund

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ELKO DAILY FREE PRESS, Elko, Nevada • 45

advisory committee. “This is our investment in the future of Elko.” The mining company has already paid one installment of $25,000 and plans to donate the rest over the next year. Barrick is also contributing $16,000 to the organization’s operating fund over four years. “We’re proud to be the initial corporate sponsor,” said Rebecca Darling, Barrick director of corporate responsibility. “We would challenge — in a friendly, loving way — for other businesses to join us.” The Community Foundation of Elko County formed in December 2015 with the mission of strengthening Elko County “through philanthropy and leadership” and “connecting people who care with causes that matter.” As a rural affiliate of a larger group, the Community Foundation of Elko County is administered by the Community Foundation of Western Nevada. A local board helps oversee a permanent endowment fund, supported by individual, legacy, estate and business donations. Interest generated from the fund is granted to Elko County organizations. “I like to call it a retirement plan for our community,” Neddenriep said. The total local endowment announced Jan. 4 was $48,913, up from about $16,000 the previous year. Fr o m t h e a va i l a b l e resources, the organization gave two $500 grants to area groups selected from a pool of 12 applicants. “We just wanted to award all of them, but we had to make choices,” said Ben Reed, Elko police chief who serves on the fund advisory committee. He explained that even though the donations might have been

“I like to call it a retirement plan for our community.” — Katie Neddenriep, Barrick’s corporate social responsibility manager and Community Foundation of Elko County advisory committee chair

small this first year, “every one of those dollars counts.” Recipients of the first grants were the North East Nevada NAMI, the local chapter of the National Alliance on Mental Illness, and the Local Animal Shelter Support Organization. NAMI representative Flora Boyer said the grant was meaningful to the organization “because mental illness hits one in five Americans at one time in their life. We are grateful and thank you so much.” LASSO president Curtis Calder, also the Elko city manager, said the donation was combined with other funding to help provide lower-cost spay and neuter operations. “These are organizations that strengthen the fab ric of our community,” said Elko City Councilman Reece Keener. “This fund provides a mechanism for sustainability.” For more information, visit nevadafund.org or call Neddenriep at 775-340-4654.

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46 • MINING QUARTERLY, SPRING 2018

COMMUNITY

Newmont Mining Corp.’s Jaymie Donovan presents a $100,000 donation to representatives from the City of Elko. From left, Councilman Reece Keener, Mayor Chris Johnson, Donovan, Parks and Recreation Director James Wiley and Elko City Manager Curtis Calder. SUZANNE FEATHERSTON

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ELKO DAILY FREE PRESS, Elko, Nevada • 47

Newmont gives $100K to city Donation will boost sports complex SUZANNE FEATHERSTON Mining Quarterly editor‌

‌Newmont Mining Corp. established itself as a player in support of the Elko Sports Complex by delivering a donation of $100,000. “We were pleased to support the community with this sports complex,” said Jaymie Donovan, Newmont external relations representative. “It aligns well with our value of sustainability, and we’re excited to see that there is going to be a venue in Elko that supports recreation and wellness for our youth and their families.” Plans for the $8.9 million Elko Sports Complex project feature three baseball/softball fields that can accommodate soccer and football to be constructed in Phase I.

“We really want to focus on Elko as a sports destination,” said James Wiley, Parks and Recreation director. The complex will be built on part of an 80-acre city-owned property lined by Bullion Road on the south side of the Humboldt River west of Errecart Boulevard. The project includes wetland mitigation, and a future phase could incorporate the nearby geothermal activity at Hot Hole as a history tourism attraction. “It brings a lot of different aspects to the city,” said Elko Mayor Chris Johnson, describing how the complex will fill a need for sports fields and is expected to attract regional players. “It goes along the same strategy of getting people to Elko, increasing the room tax and stimulating the local economy.” The city put the project out for bid Dec. 15, will open bids Jan. 29 and could declare the award in mid-February. On that schedule, construction

would start in spring 2018, and the first athletes might play on the fields in 2020. “I think the community has been behind this project for decades, and it’s nice to see its realization now,” Wiley said. “Certainly without private donations like Newmont’s that we got today, the project wouldn’t be feasible.” Barrick Gold Corp. also made a donation to the city toward the complex, and companies or individuals can contribute through the Elko Parks Foundation. During the check presentation at Elko City Hall in December, City Councilman Reece Keener thanked the mining company for its support. “It’s really terrific to get this community support from Newmont,” he said. “The important thing about getting private donations like this is that it really enables the grant funding to be leveraged.”

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48 • MINING QUARTERLY, SPRING 2018

INDUSTRY

Gold prices rose 12.67% 2017 gains the best in seven years SUZANNE FEATHERSTON Mining Quarterly editor‌

‌ old prices in 2017 gained the G best annual advance in seven years, starting below $1,170 per ounce and closing Dec. 29 at $1,302.50 per ounce, Kitco reported Friday. In 2010, prices were up 30.6 percent while the increase this year represents an advance of 12.67 percent. Yet gold did not have steady growth in 2017. A rocky ride took levels up to about $1,300 several times over the year, including in April, June, August and September, when it hit its highest price at $1,357.

Going Up? According to a Kitco News survey, 15 of 23 opinions from Wall Street – or 65 percent — called for gold to finish higher in 2018.

In December, prices dropped to $1,236 before climbing again to end on a high note. The monthly advance totaled 1.6 percent. Experts cite geopolitical tensions and a weak U.S. dollar for supporting gold prices. Staying at about $1,300 per ounce might be the goal of some for 2018, but critics say the high level will be difficult to maintain

ELKO DAILY FREE PRESS FILE‌

in the new year. Newmont Mining Corp.’s stock price closed Dec. 29 at $37.52, after ranging from $31.42 to $39.63 throughout the year. Barrick Gold Corp. closed at $14.47, after ranging from $13.28

to $20.78. Kinross Gold Corp. ended at $4.32 after a low of $3.10 and a high of $4.91. McEwen Mining Inc. landed at $2.28 after trading from $1.82 to $4.43 in 2017.

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50 • MINING QUARTERLY, SPRING 2018

SAFETY

Fewer fatalities in 2017 Metal/nonmetal deaths at all-time low

SUZANNE FEATHERSTON Mining Quarterly editor‌

‌Fatalities over 2017 in the U.S. metal/nonmetal mining industry totaled 13, an all-time low, according to the Mine Safety and Health Administration. “Every number, no matter how small, represents a person and their family – as an industry, we don’t forget the loss of our colleagues,” the Nevada Mining Association stated. “2017’s safety statistics are a noteworthy accomplishment, especially given the millions of hours miners in Nevada and throughout

“2017’s safety statistics are a noteworthy accomplishment, especially given the millions of hours miners in Nevada and throughout the U.S. worked in the hard rock mining industry, and serve to intensify our focus on making sure every miner goes home safely every day.”

— Nevada Mining Association

the U.S. worked in the hard rock mining industry, and serve to intensify our focus on making sure every miner goes home safely every day.” Ten years ago, there were

33 fatalities; and 100 years ago, there were 983 fatalities, MSHA reports. In 2015 and 2016, 17 fatalities occurred each year, according to a Dec. 31, 2017 report. The metal/nonmetal industry includes mills, sand and gravel, surface and underground operations for metal, nonmetal and stone. Of last year’s metal/nonmetal deaths, one occurred underground because of fall of roof or back. The remaining deaths happened on the surface, with six on powered haulage, three because of falls/slide of material, two because of machinery and one because of electrical. Two of the metal/nonmetal deaths occurred

in Nevada in 2017. “It is important for miners to stay vigilant because there is rarely just one person responsible for an injury or death,” said Dr. Thomas “Ted” Boyce, president and senior consultant with the Center for Behavioral Safety LLC. “When a mine operator develops a culture where individual workers feel empowered to point out problems and raise concerns about each other’s safety AND management judiciously acts on these concerns, injuries and deaths are prevented.” The U.S. coal mining sector lost 15 people to fatal accidents in 2017, up from eight the previous year.

MINE SAFETY AND HEALTH ADMINISTRATION‌

This chart, released Jan. 3 by the Mine Safety and Health Administration, compares the end-of-year total fatalities for metal/nonmetal and coal 2013-2017.


SPRING 2018 ELKO DAILY FREE PRESS, Elko, Nevada • 51


52 • MINING QUARTERLY, SPRING 2018

BUSINESS

Komatsu hits 10 years of AHS

‌K omatsu Ltd. celebrated the 10th anniversary of the commercial deployment of its Autonomous Haulage System in January. Now, more than 100 AHS trucks operate around the clock, hauling three different commodities in six mines across three continents. Based on the 10-year record of safety, productivity, environmental resistance and system flexibility in an array of mining environments, Komatsu plans to accelerate the pace of AHS deployment. AHS trucks operate in Australia, and North and South America. In 2005, Komatsu began the AHS trial at Codelco’s copper

mine in Chile and succeeded in achieving the world’s first commercial AHS deployment with Codelco in January 2008. A second successful deployment followed in late 2008 at Rio Tinto’s iron ore mine in Australia, and Rio Tinto currently operates AHS trucks in four mines in the Pilbara region of Western Australia. The entire AHS operation is controlled remotely and efficiently from Rio Tinto’s operations center in Perth, roughly 1,500 km from the mines. Following those successes of AHS deployments, Komatsu supported Suncor’s pilot of AHS in a section of its oil sands mine in Canada in 2013.

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By the end of 2017, the AHS recorded a world-leading, cumulative total of 1.5 billion tons of hauled materials. To extend the proven AHS benefits to operations with manned haul fleets, Komatsu conducted and successfully completed trials of its AHS retrofit kit at Rio Tinto’s existing mine in September 2017. The kit, mounted on a Komatsu electric drive standard truck 830E

(nominal payload: 220 tons), enabled the truck to operate in autonomous mode. As a result, Komatsu recently received an order from Rio Tinto for 29 AHS retrofit kits, to be installed on 830E standard trucks currently operating at Rio Tinto’s Brockman 4 mine. Komatsu is also planning to enhance the AHS’s mixed-operation functions for blended fleet operations.


SPRING 2018 ELKO DAILY FREE PRESS, Elko, Nevada • 53

Robinson Nevada Mining Company (RNMC) operates near Ruth, Nevada just 7 miles outside of Ely, Nevada. Ely is a great place for outdoor enthusiasts, while RNMC is a great place to work. Zero Harm for our employees, Community and Environment are our highest priority. RNMC is an equal opportunity employer.

For a full list of our current openings, please visit a Nevada Job Connect Office or email your resume and cover letter to: RNMC.Recruiting@kghm.com. Please indicate the position you are applying for. All applications/resumes will be reviewed by the respective department and only candidates selected for an interview will be contacted. If you have any questions or would like additional information, please contact Human Resources (775) 289-7000 fax (775) 289-7084. Robinson Nevada Mining Company P.O. Box 382, 4232 West White Pine County Rd 44 Ruth, NV 89319 USA


54 • MINING QUARTERLY, SPRING 2018

PEOPLE

SUBMITTED PHOTOS

Rebecca Darling visits a mine site in Mongolia. She now works for Barrick U.S.A. as the director of corporate social responsibility.

Q&A with Rebecca Darling Barrick director of corporate social responsibility SUZANNE FEATHERSTON Mining Quarterly editor

The corner office of Rebecca Darling, the recently appointed corporate social responsibility director for Barrick U.S.A., preserves a patch of empty floor and wall for yoga practice. The world traveler with a master’s degree in public administration joined the Nevada mine operator Nov. 15 after more than 15 years of experience in social development and environmental policy work. Darling is originally from California, and most recently worked for Rio

Tinto mining group in Arizona as the communities and social performance manager. About moving farther west into a community focused mining, she said, A world-traveler and avid yoga student, Rebecca Darling joined Barrick “I came here for the job, but I am U.S.A. in late 2017 as the director of corporate social responsibility. excited to be living here as well.” date. With mining, it’s different mined. So everything from your because there is an end date. The toothpaste to our cellphones has What is corporate resource will be exhausted and something that is mined in it. We as a society need these resources, social responsibility? the mine will close. We don’t pick were the ore is. so how are we going to do it in the Historically in mining, com- Sometimes it’s in very remote most responsible way possible? panies didn’t do anything at all areas. Sometimes it’s in conflict It’s really, “How do we extract areas. Sometimes it’s in coun- a resource and provide it for in “giving back.” Companies like the Gap tries without a lot of infrastruc- society in a way that shares as have very good corporate social ture. Sometimes it’s right in much of the pie as possible?” For us in particular — and I’ve responsibility. Nike has some- someone’s backyard. thing. Walmart has a foundation. But we’re at a place in life, in worked all over the world — Those are industries and busi- society, where we drive cars, and economic participation is really nesses that will go, if successful, we have gadgets, and there is a almost always right at the top of in perpetuity. There is not an end saying that if it is not grown, it’s the list. The things that I have


ELKO DAILY FREE PRESS, Elko, Nevada • 55

found with very little variation are environmental stewardship, economic participation, and then cultural heritage or preservation, and that can look different in each place. For us, corporate social responsibility is economic development, workforce development, buying locally, education investments, those kinds of things. That’s a win-win because it gives us what we call at Barrick “license to operate,” LTO, which is having your neighbors, your host community, say, “Yeah, we’re happy to have you here. We’re glad that you’re here.”

Why did you want to work in Nevada? One of the things I appreciate about this company is they are striving to always do better. And that’s key for me. This field, corporate social responsibility, is relatively young, and it’s messy because it’s human based. It’s the marriage of a highly technical industry, and then you layer on that people, and what they care about, what they’re worried about, and what they hope for, and how this is going to dramatically impact their lives. The pieces of the puzzle of that are so interesting. That’s what got me interested in this field in general. What I liked about Barrick when they approached me

It doesn’t mean that we can’t do more and do better, but we’re probably OK. We have a stable government system here, and in other places, an election can turn a country into a tailspin. When you have a long-term project, that tumultuousness is completely different. Elko in this region in Northern Nevada is so mining friendly because much of Nevada was built around that. Rebecca Darling, the corporate social responsibility director for Barrick U.S.A., takes in a New Year’s day hike in Lamoille.

the communities, so they have very high trust. But because we will be making some changes, I can’t come right out of the gate and do that. Plus I just need to know more. For me, the first part of the year will be learning and understanding the approach What are your we have been taking, figuring out the “Why?” and the “What priorities in this job do we want?” and then probafor 2018? bly making some adjustments For me, personally, there’s around that. a lot to learn. It’s important in this arena to listen first to build How do social trust and rapport and relation- responsibility ships. I made a presentation strategies in the U.S. this week to the Nevada oper- compare to practices ations. I can’t just come in and in other countries? say, “This is what we’re doing. This is what I need from you.” I In other countries, particularly need to spend time explaining in developing countries or emergways that make sense for them ing economies where the rule of and to them so that I’m adding law is weak, is where it looks a lot value to their job, and [I need to] different. In the U.S. where the build relationships so that they rule of law is strong, if we comtrust me so that we can work ply with permitting and the laws together. The team here is from of the land, we are probably OK. about this position is, they are doing really well in Nevada and the U.S. as far as corporate social responsibility goes, but they said, “We can still improve, and we want you to lead that,” and that’s an awesome responsibility.

What has been the most rewarding project or moment of your career so far? In international development, you work for these projects, all for maybe two, three, five years, and there’s funding that comes from USAID or World Bank, and then it ends. I was a manager for one of those projects. The thing that means so much to me is that every Mongolian who worked for me in Mongolia got at least one international experience, and the younger of them all got some educational experience outside and now all of them have gone on and have careers and still ask me for letters of reference. This was 2007. My ability to leverage that project and the funding we had to get them exposure and education and experience beyond their own country to bring back to their country and use — the impact that that had was so much longer than the project — is something I’m really, really proud of.

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56 • MINING QUARTERLY, SPRING 2018

BUSINESS

Epiroc focuses on mining May split from Atlas Copco SUZANNE FEATHERSTON Mining Quarterly editor

‌To better focus on its mining and civil engineering customers, Atlas Copco created Epiroc as a subsidiary that could become a separate company this year. Atlas Copco continues to serve industrial customers. “We are building two worldclass companies instead of one,” Atlas Copco states in an online video. The decision to split came in early 2017 as a way to increase shareholder value and meet

customer demand. Shareholders are scheduled to vote in April whether to dividend out Epiroc as early as this summer to be listed separately on the Nasdaq Stockholm stock exchange. The 145-year-old Sweden-based company settled on Epiroc as the name to “signal stability and durability.” “Epi” is a prefix meaning “on,” and “rock is one of the most important materials the company works with,” according to a

press release. “With Epiroc we have found a short, distinct and timeless name that is spot on for the mining and civil engineering businesses,” said Annika Berglund, Atlas Copco senior vice president of corporate communications and governmental affairs. The transition is expected to be seamless, with research and development, and products and services remaining the same under Epiroc as they were under

Atlas Copco. Epiroc has 12,5000 employees worldwide, and all will keep their jobs, said said Ola Kinnander, Atlas Copco media relations manager who will move to Epiroc after the change. “What the split really means is that top management will come even closer to this business, not having to deal with Atlas Copco’s other businesses, and with that increased focus we will be able to serve customers even better,” Kinnander said. Leading Epiroc are Per Lindberg as CEO, and Ronnie Leten, former Atlas Copco president and CEO, as chairman of a board of directors.


SPRING 2018 ELKO DAILY FREE PRESS, Elko, Nevada • 57


58 • MINING QUARTERLY, SPRING 2018

EXPLORATION

Goldstorm core hole unearths surprises “Discovery of multiple mineralized zones and an extensive, weathered and fractured ‌E LKO — The first explor- structural system near to atory drill hole at the Gold- surface beginning at only 20 storm Project displays char- feet of depth and extending to acteristics of some of Neva- over 1,200 feet of depth, were da’s most prolific gold mines, surprises,” said Christopher J. S ta ke h o l d e r G o l d C o r p. Berlet, president and CEO of announced Jan. 16. Stakeholder Gold, a Canadian The company recently com- mineral exploration company pleted its first core drill hole headquartered in Toronto. on property north of Klondex SGC submitted samples to an Elko labGold Mines Ltd.’s Midas mine and “We had a bunch oratory for fire Newmont Minof surprises with a s s a y a n a l ing Corp.’s Twin ys i s f o r go l d this first hole. C re e k s m i n e . and silver, and It looks like IDEA Drillpotentially a new results back in ing performed discovery. We are the first quarthe drilling. looking for another ter. More drilling and further “ We h a d a Midas mine. bunch of surThat’s the kind of assays will be prises with this required to back target range we first hole,” said are looking for.” up the visually observed minR i c k Re d fe r n , geological con- Rick Redfern, geological eralization, but consultant and project sultant and projRedfern said manager for the Goldstorm the project is ect manager for Project off to a “great the Goldstorm Project. “It looks like poten- start” with a good team and tially a new discovery. We are financing, aided by high gold looking for another Midas prices. Capital investment so mine. That’s the kind of target far totals about $300,000range we are looking for.” $400,000, he said. A wide zone of highly “We thought we were only altered basaltic rocks con- looking for underground tartaining quartz-silica-pyrite gets,” Redfern said. “But now mineralization was discovered … it looks like there is potenin the upper part of the hole, tial for open pit targets as well from a depth of 20 to 438 feet, at Goldstorm.” the company reported. Farther The company has started down, new zones of silica- a second hole and has a third pyrite-(naumannite) min- planned on unpatented lode eralization were also found. claims that it controls. Total Drilling took place at an angle combined ground position of about 70 degrees, Red- encompasses 3,806 contigufern said. ous acres. SUZANNE FEATHERSTON Mining Quarterly editor‌

RICHARD REDFERN‌PHOTOS

Core samples from the first drill hole at the Goldstorm Project near Midas have been submitted for fire assay.

Stakeholder Gold Corp. drills at the Goldstorm Project.


ELKO DAILY FREE PRESS, Elko, Nevada • 59

EXPLORATION

eCobalt drilling results Company increases resource estimate for Idaho project

‌VANCOUVER – eCobalt Solutions Inc. announced the results of an updated resource estimate for the Idaho Cobalt Project in the Idaho Cobalt Belt near Salmon, Idaho, showing increased measured and inferred resources. The company’s Idaho Cobalt Project in east-central Idaho, is the only environmentally permitted, primary cobalt project in the United States. It is 100 percent owned by the company’s wholly owned subsidiary, Formation Capital Corp., U.S. The update is based on results from a three-hole, 5,000-foot drill program completed in 2017, as well as a review and inclusion of past drill results not included previously, and the creation of a new three-dimensional resource model using current state of practice software and geostatistical tools. Comparing the updated resource model to the resource model dated Sept. 27, 2017, highlights include: • Total measured and indicated resources increased to 3.87 million tons at 0.59 percent cobalt, compared to 3.44 million tons at 0.59 percent cobalt. • Inferred resources increased to 1.82 million tons at 0.46 percent cobalt from 1.54 million tons at 0.50 percent cobalt. These results will be incorporated into a new, optimized feasibility study planned for completion in Q2 2018. Until that study is finalized there can be no assurance that any increase

A screenshot from an investor presentation shows the location and key stats about eCobalt Solutions Inc.’s Idaho Cobalt Project.

in resources will result in a material change to the reserves and economics of the Idaho Cobalt Project. “The updated resource model delineates an increase in the resources available for reserve and is in line with our expectations with regards to the targeted conversion of inferred resources to M&I,” said Floyd Varley, eCobalt’s chief operating officer, in a Feb. 7 statement. “Work is ongoing to determine the economic significance of these results, which will be incorporated into a new feasibility study and mine plan. The updated resource model also provides additional insight into the controls of mineralization.

This information will help inform future drilling efforts to advance the Ram deposit, as well as planning of mine infrastructure.” The updated resource model takes into account a minimum mining width of 6 feet. Also included are approximately 400,000 tons grading 0.5 percent cobalt containing 4 million pounds of cobalt in the M&I category located mainly in the newly drilled deeper southern end of the Ram deposit, as well as in hanging wall structures. These structures are limited by a lack of sampling in many of the Ram drill holes and warrant further definition drilling from underground.

“The work undertaken to update the resource model for the Ram deposit has provided us with an improved understanding of the deposit,” said Paul Farquharson, president and CEO of eCobalt. “The data provides additional confidence that the deposit remains open at depth and along strike and will be used to delineate future expansion drilling efforts. Another key milestone has been achieved for the company as we move towards production at the [Idaho Cobalt Project] – the only near-term primary cobalt deposit in the United States.” eCobalt is listed on the Toronto Stock Exchange and is committed to providing clean cobalt products essential for the rapidly growing rechargeable battery and renewable energy sectors, made safely, responsibly, and transparently in the United States.


60 • MINING QUARTERLY, SPRING 2018

SAFETY

MINING AND MARIJUANA

Mines maintain strict pot policies

SUZANNE FEATHERSTON Mining Quarterly editor‌

‌As Nevada government grapples with how to manage the legalization of marijuana, northeastern Nevada’s major mining companies maintain a hard stance on alcohol and drug use policies for employees. “Newmont has taken a zero tolerance position on marijuana use in the workplace,” Newmont Mining Corp. said in a statement. “Employees who test positive will be terminated.” Nevada voters legalized the use of recreational marijuana

effective Jan. 1, 2017, and medical marijuana in 2001. The state’s first medical marijuana establishments became operational in 2015. Over the past three years, marijuana positivity in safetysensitive and general U.S. workforces increased, according to a May 2017 Quest Diagnostics report that analyzed millions of workforce drug test results. In urine tests of the safetysensitive workforce, marijuana positivity increased nearly 10 percent — 0.71 percent in 2015 versus 0.78 percent in 2016, the report shows. Local governments can regulate cannabis businesses in their jurisdictions, and Elko’s elected

we drill rock.

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officials have approved ordinances that prohibit marijuana establishments. In past years, Elko County prohibited recreational and medical marijuana establishments in unincorporated areas, and the City of Elko approved an ordinance Feb. 13 that bans recreational and medical marijuana businesses in the city. “We are a mining community, and we depend on the mines for jobs, for tax revenue base, and we do not want to do something by implementing recreational marijuana and/or medical marijuana,” said city councilman Reece Keener during a Jan. 9 city council meeting. “Marijuana use is not compatible with the

mining-sector employment.” In response, councilman John Patrick Rice said that “the mines are fully capable of managing it themselves.” Mining companies consistently adhere to policies that prohibit the use of substances — including marijuana — that could endanger employees and others at worksites where risks are present. Jobs in the industry rank among the Bureau of Labor Statistic’s top 10 most dangerous professions. The Occupational Health and Safety Act of 1970 states that an employer must “furnish to each of his employees employment See Marijuana, 62

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62 • MINING QUARTERLY, SPRING 2018

Marijuana From 60

and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees,” according to Section 5 of the act. “Barrick’s intent is to provide a safe, healthy, productive and respectful work environment for all its employees, contractors, and visitors,” Barrick Gold Corp. said in a statement. “Our drug and alcohol policy was written with these priorities in mind and in accordance with current laws. We continue to monitor the issue but do not foresee a change to our policy at this time.” The Mine Safety and Health Administration provides guidance about drug and alcohol use at mines through the Code of Federal Regulations. The administration states in 30 CFR 56/57.20001 that “intoxicating beverages and narcotics shall not be permitted or used in or around mines. Persons under the influence of alcohol or narcotics shall not be permitted on the job.” Although cannabis is not considered a narcotic, federal law still classifies marijuana a controlled substance. The Drug Enforcement Administration categorizes cannabis as a Schedule 1 drug, defined as “drugs with no currently accepted medical use and a high potential for abuse,” according to the DEA. Marijuana extract is also listed as a Schedule 1 controlled substance. Perhaps in response to the state law change, mining companies’ policies seem stricter now than ever, said Virginia Babiuk, spokeswoman for A1 Alcohol & Drug Collections in Elko. “In mining, they still adhere to a very strict standard,” she said. “They follow, as well as we follow, the federal regulations.” A1 has served Elko for eight

PROJECTMANHATTAN, WIKIMEDIA COMMONS‌

Marijuana can be detected through a urine analysis.

years, plus 10 more under a previous name. The locally owned and operated company provides drug and alcohol testing for businesses, including mining companies. “It’s still a safety concern because they don’t want to jeopardize safety-sensitive issues,” Babiuk said. “It is still not [federally] legal. Every company has their own policies about what to do with it if it showed up. The policies are strict.” Through A1, marijuana normally is identified via urine analysis in a lab, Babiuk said. Some forms of marijuana can stay in

a person’s system for days or weeks, depending on metabolism rates and frequency of use. “Every test we take goes to a certified lab,” Babiuk said, explaining that the company follows U.S. Department of Transportation standards and every technician is certified. “That’s why we have the clients we do. They want to be safe.” Barrick and Nemont conduct pre-employment screenings and random testing, and administer tests based on reasonable suspicion and after safety incidents or accidents, the companies stated. Barrick also requires its

contractors and vendors to have drug and alcohol testing procedures for their employees. “Employees and contractors found to be in violation of Barrick’s drug and alcohol policy face disciplinary action up to and including termination,” Barrick stated. Lab tests detect tetrahydrocannabinol, or THC, which is the psychoactive chemical in cannabis. Cannabidiol, or CBD, is another chemical found in marijuana that has antipsychotic effects, according to the National Library of Medicine. THC and CBD can be found in medical marijuana. Employers, including mining companies, are allowed to restrict medical marijuana in the workplace, according to the Nevada Revised Statutes. NRS Chapter 453A.800 states that an employer is not required to allow the medical use of marijuana in the workplace. The statute also does not require an employer to modify the working conditions of a person who uses medical marijuana. The law does, however, state that an employer “must attempt to make reasonable accommodations for the medical needs of an employee who engages in the medical use of marijuana if the employee holds a valid registry identification card,” provided that the accommodations do not “pose a threat of harm or danger to persons or property or impose an undue hardship on the employer,” or “prohibit the employee from fulfilling any and all of his or her job responsibilities.” The law of the state might change, but the law of the land in the mining industry remains the same. “Newmont does not foresee changes, however, Newmont continuously reviews employment policies to ensure compliance with all State and Federal laws,” Newmont said.


ELKO DAILY FREE PRESS, Elko, Nevada • 63

Industry Ingots Mining industry news briefs ‌Nevada Zinc drilled the first core hole at the Lone Mountain zinc project since the 1940s, reported Mining Journal. The highlight was a 16.62m interval averaging 12.79 percent Zn and 8.84 percent Pb (21.63 percent Zn+Pb) within an overall intercept of 91.5m at 7.67 percent Zn and 1.93 percent Pb (9.58 percent Zn+Pb) from 118.04m depth. The Mountain View zinc mine produced more than 5 million pounds of zinc, 650,000 pounds of lead and 4,000 ounces of silver between 1942 and 1968. Nevada Sunrise Gold Corp. signed a definitive agreement to acquire a 100 percent

interest in the historic Lovelock Cobalt Mine property in Churchill County, approximately 100 miles east of Reno. The agreement, announced Dec. 29, stipulates that the company will earn a 100 percent interest in the property through cash payments and common shares payments to an underlying vendor payable over three years from the signing of the agreement, subject to a 2.0 percent net smelter returns royalty. The Lovelock Mine property area consists of 35 unpatented claims in the Cottonwood Canyon area of Stillwater range totaling approximately 700 acres, and it was mined between 1883 and 1898. The first sage-grouse conservation credit went to

Kinross Gold U.S.A. through the Nevada Department of Conservation and Natural Resource. The credit transaction took place under the Nevada Conservation Credit System program and is expected to protect nearly 10,000 acres of primary sage-grouse habitat in northeast Nevada. The transaction sets a precedent and will make the process more efficient for landowners to participate in the CCS in the future. The program was created to preserve and enhance sage-grouse habitats by trading conservation credits to offset potential environmental impacts of land use and aims to maintain the multiple-use concept on public land, and to improve habitats on private and

public lands. Kinross’s wholly-owned subsidiary, KG Mining Inc., enrolled in the program to meet its voluntary compensatory mitigation obligations to offset potential sage-grouse effects due to its mining activities at its Bald Mountain gold mine in northeast Nevada. KG Mining (Bald Mountain) Inc. enrolled the company’s privately-owned ranch, Tumbling JR, into the CCS program to help protect nearly 10,000 acres of sage-grouse habitat that supports the species’ entire life cycle. The most recent addition to Atlas Copco’s Minetruck series is designed to ramp up productivity, the company See Ingots, 64

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64 • MINING QUARTERLY, SPRING 2018

Ingots From 63

WIKI COMMONS‌

Graphite

SUBMITTED‌

Atlas Copco’s Minetruck MT54

SUBMITTED‌

Barrick donated 32 Dell Chromebooks to Grammar No. 2 in January.

announced Nov. 30. The rugged Minetruck MT54, engineered for smart and efficient haulage, is a powerhouse just like the larger Minetruck MT65. The more compact Minetruck MT54 is designed for 54 tons of load capacity and higher ramp speeds than its predecessor Minetruck MT5020. Minetruck MT54 also features Atlas Copco’s proprietary Rig Control System. It is ready for automation and can be equipped with Certiq for added intelligence. The optional telematics system solution gathers and compiles data to help optimize operations and plan maintenance. B a r r i ck G o l d C o r p. announced Dec. 1 that it acquired 48,000,000 common shares of Reunion Gold Corp. in a nonbrokered private placement at a price of $0.19 per share for total consideration of $9.12 million. As a result of the transaction, Barrick owns 48 million common shares, representing approximately 15 percent of Reunion’s issued and outstanding common shares. Barrick acquired the common shares for investment purposes. Global Li-Ion Graphite Corp. received approval on its plan of operations filed with U.S. Department of Agriculture and U.S. Forest Service to commence work on its Chedic Graphite Project in Carson City, according to a Dec. 8 press release. The exploration and development company plans to commence work immediately including confirmation and exploration drilling. Global Li-Ion Graphite is focused on the acquisition and development of graphite projects with an intent to supply the energy storage industry. The Chedic Graphite Project consists of 50 unpatented mining claims totaling approximately 1,000 acres.

The South Dakota School of Mines & Technology added a Ph.D. mining engineering specialization, the college announced Jan. 10. The mining engineering and management department recommended the specialization in response to increased interest from students; an increased need within the industry and government for Ph.D. employees; and a desire for more federal research funding opportunities. Golder, a global engineering and consulting fir m, unveiled its refreshed brand in January. This is the first major refresh of the company’s brand in more than 50 years and represents Golder’s commitment to its clients and communities, the company stated. Golder works on projects around the world, including deep mine shafts in Africa to tall building foundations in Australia, from an airport in Hong Kong to pipelines in Canada, from tailings management in Chile to waste management in the U.S., from transportation tunnels in the U.K. to groundwater remediation in Italy. Newmont Mining Corp. has been recognized for top performance in the mining sector in The Sustainability Yearbook 2018, the company announced Feb. 8. The yearbook is published by RobecoSAM, a sustainability investment firm that manages one of the most comprehensive databases of financially material sustainability information in the world. RobecoSAM’s assessment is used to determine the composition of the Dow Jones Sustainability World Index, which ranked Newmont as the mining industry’s overall leader in 2015, 2016 and 2017. Newmont was also recognized as one of the world’s most admired companies in an in-depth global survey conducted by Fortune magazine, the company announced Jan. 25, based on quality of management, social responsibility, long-term investment, people management


ELKO DAILY FREE PRESS, Elko, Nevada • 65

and innovation. Fortune bases its ranking on the opinions of 3,900 executives, directors and securities analysts. The American Exploration & Mining Association honored two North American mining companies at its 123rd annual meeting in late 2017 in Reno. Kinross Gold U.S.A., Inc. received AEMA’s Environmental Excellence Award for remediation and reclamation of the Mineral Hill Mine, located adjacent to Yellowstone National Park in Montana. Klondex Mines Ltd. received the Platinum Award for Corporate Excellence in recognition of their outstanding gift to the Te-Moak Tribe of Western Shoshone and for their work with the tribe in planning a mine that is culturally respectful and responsible. Nevada Copper Corp. contracted a $378 million construction financing and recapitalization package designed to

provide a comprehensive funding solution and clear pathway toward first production in 2019 from the Pumpkin Hollow copper mine. The company also completed the private placement of 256,410,256 special warrants of the company at a price of C$0.50 for aggregate gross proceeds of C$128,205,128. Nevada Copper is poised to transition to producer status from its strategic mineral assets in its 100 percent owned Pumpkin Hollow, the only fully permitted copper project of scale in the U.S., consisting of two proposed copper mines: a near-production, highgrade underground mine with an existing production-size shaft and infrastructure, and a large-scale open pit project with resource upside and optionality to pursue a staged-development plan. Barrick recently helped bring technology-enabled lessons into Grammar No. 2

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66 • MINING QUARTERLY, SPRING 2018

INDUSTRY

Critical minerals Report deems U.S. dependent on foreign minerals

‌WASHINGTON – The extent to which the United States is fully, majorly, or partially dependent upon foreign competitors and adversaries for a supply of “critical minerals” is the subject of a report by the U.S. Department of the Interior and the U.S. Geological Survey, released Dec. 19. The report identified 23 of the minerals that are most-needed to sustain national defense and the economy and are used in manufacturing everything from batteries and computer chips to equipment used by the military. “I commend the team of scientists at USGS for the extensive work put into the report, but the findings are shocking,” said U.S. Secretary of the Interior Ryan Zinke. “The fact that previous administrations allowed the United States to become reliant on foreign nations, including our competitors and adversaries, for minerals that are so strategically important to our security and economy is deeply troubling. As both a former military commander and geologist, I know the very real national security risk of relying on foreign nations for what the military needs to keep our soldiers and our homeland safe.” The report found the United States is most reliant on China for critical minerals with at least 20 critical minerals being

Today, advanced technologies have increased the demand for and production of mineral commodities for nearly all elements in the periodic table.

sourced exclusively in China. Russia, South Africa, Brazil and Canada also supply many of the country’s minerals. The mineral commodities highlighted in this book have been called critical or strategic owing to concerns about risk of supply interruption and the cost of such a disruption. Such critical mineral commodities include rare-earth elements, used in high-end electronics, and platinum-group elements, used in catalytic converters and petroleum refining. “The best part of this report is that we can provide complete minerals information for the nation for the first time in generations,” said Klaus Schulz, an editor and author of the volume. “The USGS combines shortand medium-term data on the current global supply of minerals with research on the longterm potential of these minerals through our mineral-resource assessments. Despite current supply concerns, one thing we shouldn’t lose sight of is that we will also need mineral commodities far into the future. We wanted to identify future needs too, so we included information to help plan for the sustainable development of each of

these minerals.” This report updates another USGS report from 1973, which was published when many of the commodities that are covered in this new volume were only of minor importance. Today, advanced technologies have increased the demand for and production of mineral commodities for nearly all elements in the periodic table. For instance, in the 1970s, rare-earth elements had few uses outside of some specialty fields, and were produced mostly in the United States. Today, rare-earth elements are integral to nearly all high-end electronics and are produced almost entirely in China. According to the recently released USGS Mineral Commodity Summaries 2017, the United States was 100 percent net import reliant on 20 mineral commodities in 2016, including manganese, niobium, tantalum and several of the other mineral commodities covered in the new volume. This number has risen dramatically over the past 60 years. For example, in 1954 the United States was 100 percent import reliant for the supply of only eight nonfuel mineral

commodities and by 1984 for 11 commodities. Since 1973, there has also been a significant increase in knowledge about geologic and environmental issues related to production and use. This report addresses the sustainable development of each mineral commodity in order that the current needs of the nation can be met without limiting the ability of future generations to meet their needs. For each mineral commodity, the authors address how the commodity is used, the location of identified resources and their distribution nationally and globally, the state of current geologic knowledge, potential for finding additional deposits, and geoenvironmental issues that may be related to the production and uses of these mineral commodities. The volume, USGS Professional Paper 1802, is titled “Critical Mineral Resources in the United States–Economic and Environmental Geology and Prospects for Future Supply”. The USGS also regularly produces mineral information products, such as the yearly Mineral Commodity Summaries, the Minerals Yearbook, and mineral-resource assessments.


ELKO DAILY FREE PRESS, Elko, Nevada • 67

INDUSTRY

Putting U.S. minerals first Executive order prioritizes U.S. mineral production for security, economy ‌WASHINGTON – President Donald J. Trump signed an Executive Order Dec. 20 to reverse the decades-long trend of increasing dependence on foreign imports of critical minerals that are essential to American prosperity and national security, according to a news release from the U.S. Department of Interior. Earlier this week, the DOI, led by the U.S. Geological Survey, released a report that examined 23 minerals that are needed for manufacturing everything from batteries and computer chips to equipment used by the military.

President Donald Trump speaks during a cabinet meeting at the White House.

“This executive order will prioritize reducing the nation’s vulnerability to disruptions in our supply of critical minerals safely and responsibly for the benefit of the American people,” Trump said. “The United States must not remain

reliant on foreign competitors like Russia and China for the critical minerals needed to keep our economy strong and our country safe.” The comprehensive order aims to identify new sources of critical minerals, ensure miners and producers have access to the best data, and streamline the leasing and permitting process to expedite production, reprocessing and recycling of minerals at all levels of the supply chain. “As both a former military commander and geologist, I know the very real national security risk of relying on foreign nations for the military’s needs to keep our soldiers and our homeland safe,” said U.S. Secretary of the Interior Ryan Zinke. “I applaud President Trump’s action to fix this problem at all points in the supply chain.”

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People of Mines ‌Newmont Mining Corp.’s president and CEO Gary J. Goldberg has been honored by his peers for outstanding contributions to the mining industry through his induction into the American Mining Hall of Fame. The award recognizes Goldberg’s accomplishments over the course of his 36-year career in mining. The award is granted by the Mining Foundation of the Southwest, a nonprofit organization that works to educate students and the public about mineral resources and the mineral extraction and processing industries, and to honor outstanding accomplishments in the mining industry. ••• N e va d a C o p p e r C o r p . announced Nov. 20 the appointment of Phillip Day as vice president and chief operating officer. Day has project delivery and operating experience, and brings key project management skills required to advance the underground project into construction phase. Day’s project construction experience includes senior roles with AMEC Americas, where he managed major projects, including the brownfields expansion of Corrego do Sito Gold Project and the $1 billion Gramalote gold study for AngloGold Ashanti. Previously he worked in managerial, operational and technical roles for BHP Billiton and WMC Resources as well as commissioning and operation of the Minara Resources Murrin Murrin Nickel Laterite project. ••• Pershing Gold Corp., a Nevada gold producer whose primary asset is the Relief Canyon Mine in Pershing County,

Gary J. Goldberg

Giulio T. Bonifacio

appointed Pamela Saxton to its board of directors, announced Nov. 13. Saxton is a business executive with more than 35 years of progressive domestic and international public company finance roles primarily in mining, software and oil and gas. She serves as vice president and trustee for the Viola Vestal Coulter Foundation, which provides scholarships to various colleges and universities, with a focus on mining. She is also the past chair of the board for the Colorado Association of

Leo M. Drozdoff

Commerce and Industry, a state chamber of commerce. Saxton has held senior executive positions at various mining companies including Thompson Creek Metals Co. Inc., Franco-Nevada Corp., New West Gold Corp., Cyprus Amax Minerals Co., and Amax Gold Inc. ••• N e va d a C o p p e r C o r p . announced Feb. 13 that Giulio T. Bonifacio is retiring from his role as president and CEO effective Feb. 15. Bonifacio will continue to serve on the company’s board of directors as a nonexecutive director. Bonifacio founded Nevada Copper in 2005. Abraham “Braam” Jonker, currently a nonexecutive director of the company, will assume Bonifacio’s responsibilities as interim president and CEO, effective from Feb. 18, and will work closely with Bonifacio to ensure an orderly transition until a new leader has been appointed.

••• C o m s to c k M i n i n g I n c . announced Feb. 15 the election of Leo M. Drozdoff, 52, to its board of directors and the retirement of Robert A. Reseigh, after nine years of service, from its board of directors. Reseigh will remain involved with the company as a member of a newly established Mining Advisory Committee, to assist in all aspects of technical mining and mine development, along with Drozdoff and Dan Kappes. Drozdoff most recently served as the director of the Nevada Department of Conservation and Natural Resources from 2010 to 2016, and was a cabinet member reporting to two Nevada governors. He also served as lead administrator of Nevada’s Division of Environmental Protection for more than six years, and before that, as bureau chief over mining and water control.


ELKO DAILY FREE PRESS, Elko, Nevada • 69

Mining companies report Q4 results Select abridged results

‌Barrick Gold Corp.

TORONTO — Barrick Gold Corp. reported fourth-quarter and full-year results for the period ending Dec. 31, 2017, highlighting 5.32 million ounces of gold produced, noting a particularly strong performance from Barrick Nevada. • In 2017, Barrick reported net earnings attributable to equity holders of Barrick of $1.44 billion ($1.23 per share), and adjusted net earnings of $876 million ($0.75 per share). • The company reported annual revenues of $8.37 billion, net cash provided by operating activities of $2.07 billion, and free cash flow 2 of $669 million. • Full-year gold production was 5.32 million ounces. Cost of sales applicable to gold was $794 per ounce, and all-in sustaining costs were $750 per ounce. Copper production was 413 million pounds, at a cost of sales of $1.77 per pound, and all-in sustaining costs of $2.34 per pound. • Total debt was reduced by $1.51 billion, or 19 percent, to $6.4 billion. Barrick intends to reduce total debt to around $5 billion by the end of 2018. • Proven and probable gold reserves were 64.5 million ounces as of Dec. 31, 2017, primarily reflecting the reclassification of Pascua-Lama reserves to resources. Through increased investment in mine exploration drilling, the company more than replaced the reserves it depleted through production at existing operations in 2017. • Proven and probable copper reserves, including copper contained within gold reserves, were 11.2 billion pounds as of Dec. 31, 2017, and include the addition of approximately 2.6 billion pounds at Lumwana as a result of successful cost reduction efforts. • Barrick reported a net loss of

$314 million ($0.27 per share) in the fourth quarter, and adjusted net earnings of $253 million ($0.22 per share). • Fourth quarter revenue was $2.23 billion, operating cash flow was $590 million, and free cash flow was $240 million. • Gold production in the fourth quarter was 1.34 million ounces, at a cost of sales applicable to gold of $801 per ounce, and all-in sustaining costs of $756 per ounce. Copper production in the fourth quarter was 99 million pounds, at a cost of sales of $1.79 per pound, and all-in sustaining costs of $2.51 per pound. • Gold production guidance for 2018 is 4.5-5.0 million ounces, at a cost of sales applicable to gold of $810-$850 per ounce, and all-in sustaining costs of $765-$815 per ounce. Copper production guidance for 2018 is 385-450 million pounds, at a cost of sales of $1.80-$2.10 per pound, and all-in sustaining costs of $2.30-$2.60 per pound. • Based on the current asset mix, from 2019 to 2022 the company expects average annual gold production to be between 4.2-4.6 million ounces, at an average cost of sales of $850-$980 per ounce, and average all- in sustaining costs of $750-$875 per ounce. • In 2017, Barrick reported net earnings attributable to equity holders of Barrick of $1.44 billion ($1.23 per share), and adjusted net earnings 1 of $876 million ($0.75 per share). • The company reported annual revenues of $8.37 billion, net cash provided by operating activities of $2.07 billion, and free cash flow 2 of $669 million. • Full-year gold production was 5.32 million ounces. Cost of sales applicable to gold was $794 per ounce, and all-in sustaining costs were $750 per ounce. Copper production was 413 million pounds, at a cost of sales of $1.77 per pound, and all-in sustaining costs of $2.34 per pound. • Total debt was reduced by $1.51 billion, or 19 percent, to $6.4 billion. Barrick intends to reduce total debt to around $5 billion by the end of 2018. • Proven and probable gold reserves were 64.5 million ounces as of Dec. 31, 2017, primarily reflecting the reclassification of Pascua-Lama reserves to resources. Through increased investment in mine See Reports, 70


70 • MINING QUARTERLY, SPRING 2018

Reports From 69

exploration drilling, the company more than replaced the reserves it depleted through production at existing operations in 2017. • Proven and probable copper reserves, including copper contained within gold reserves, were 11.2 billion pounds as of Dec. 31, 2017, and include the addition of approximately 2.6 billion pounds at Lumwana as a result of successful cost reduction efforts. • Barrick reported a net loss of $314 million ($0.27 per share) in the fourth quarter, and adjusted net earnings of $253 million ($0.22 per share). • Fourth quarter revenue was $2.23 billion, operating cash flow was $590 million, and free cash flow was $240 million. • Gold production in the fourth quarter was 1.34 million ounces, at a cost of sales applicable to gold of $801 per ounce, and all-in sustaining costs of $756 per ounce. Copper production in the fourth quarter was 99 million pounds, at a cost of sales of $1.79 per pound, and all-in sustaining costs of $2.51 per pound. • Gold production guidance for 2018 is 4.5-5.0 million ounces, at a cost of sales applicable to gold of $810-$850 per ounce, and all-in sustaining costs of $765-$815 per ounce. Copper production guidance for 2018 is 385-450 million pounds, at a cost of sales of $1.80-$2.10 per pound, and all-in sustaining costs of $2.30-$2.60 per pound. • Based on the current asset mix, from 2019 to 2022 the company expects average annual gold production to be between 4.2-4.6 million ounces, at an average cost of sales of $850-$980 per ounce, and average all- in sustaining costs of $750-$875 per ounce.

Coeur Mining Inc.

CHICAGO —Coeur Mining Inc. reported full-year 2017 net income of $10.9 million, or $0.06 per share, and cash flow from operating activities of $197.2 million, an increase of over 100% compared to 2016. Adjusted EBITDA rose 4 percent year-over-year to $203.3 million, and free cash flow increased $85.5 million to $60.4 million. In the fourth quarter, the company generated net income of $14.3 million, or $0.08 per share, and cash flow from operating activities more than doubled quarter-over-quarter, increasing $54.5 million to

$91.8 million. Adjusted EBITDA and free cash flow of $77.0 million and $44.8 million, respectively, i n c rea s e d a p p rox i m a te ly fivefold compared to the prior quarter. Strong fourth quarter and full-year financial results were driven by record silver equivalent production of 10.8 million ounces (11.7 million ounces including discontinued operations) and 35.1 million ounces (39.4 million ounces including discontinued operations), respectively, lower costs from the company’s continuing operations, and decreases in working capital. Lower average debt levels and interest rates led to a 56 percent reduction in full-year interest expense, which also contributed to improved full-year financial results. On Dec. 22, 2017, the company entered into an agreement to sell its wholly-owned Bolivian subsidiary, which owns and operates the San Bartolomé mine. The transaction is expected to close in the first quarter. Rochester’s Stage IV leach pad expansion was commissioned on schedule in the third quarter after three years of permitting and 10 months of construction.

Comstock Mining Inc.

VIRGINIA CITY — Comstock Mining Inc. announced Feb. 20 selected strategic and financial highlights for the year ended Dec. 31, 2017, including exceeding its cost-reduction targets and entering an agreement for a nonmining asset sale for $4 million.

• Reduced long-term debt during the fourth quarter by over $1 million from nonmining asset sales, lowering debenture principal to $9.6 million. • Agreed to sell the Daney Ranch for $4 million, expected to close in the second quarter of 2018, subject to financing and permitting.

low despite higher costs associated with unusual precipitation. • Net loss was $10.6 million for 2017, as compared to a net loss of $13.0 million for 2016. • Net cash used in operations was $6.5 million for 2017. • Net cash provided by financing activities, was $7.4 million. 2017 selected • Total debt obligations at Dec. 31, financial highlights 2017, were $10.3 million. • Costs applicable to mining • Cash and cash equivalents at were $3.4 million in 2017, all repreDec. 31, 2017, were $2.1 million. senting depreciation, as compared to $4.5 million in 2016, a 24.7 percent reduction. • Operating expenses were $5.6 million in 2017, as compared to $10.8 million in 2016, a 48.1 percent decrease. • General and administrative expenses were $2.6 million in 2017, as compared to $3.5 million in 2016, a 26 percent reduction and a TORONTO — Kinross Gold record low. • Exploration and mine develop- Corp. announced Feb. 14 its ment expenses were $1.1 million in results for the fourth-quar2017, as compared to $4.6 million in ter and year-end Dec. 31, 2016, a 75.2 percent reduction. 2017. The company reported • Mine claims and costs were $1.0 million in 2017, as compared its sixth consecutive year of to $1.1 million in 2016, a 10.9 per- strong results including the doubling of production at its cent reduction. • Environmental and reclamation Bald Mountain mine. expenses were $0.8 million in 2017, as compared to $1.3 million in 2016, Operating results a 39.9 percent reduction and a record At Round Mountain, 2017

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2017 selected strategic highlights

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production was higher compared with 2016 mainly due to strong mill grades, which were the highest since 2003. The mine’s production decreased quarter-over-quarter largely due to fewer tons produced from the heap leach pads. Round Mountain’s full-year cost of sales per ounce was lower year-over-year mainly due to higher grades and lower labor costs. Quarterly cost of sales per ounce was higher compared with Q3 2017, mainly due to lower production and higher contractor and maintenance costs. Bald Mountain more than doubled production in 2017 compared with the previous year due to higher grades and more tons placed on the heap leach pads. As expected, production was higher in the fourth quarter compared with Q3 2017 due to the timing of ore placed on the pads. Bald Mountain lowered its fullyear cost of sales per ounce by almost half compared with 2016, and achieved its lowest

cost quarter since the mine was acquired by Kinross. These reductions were mainly due to the substantial increase in gold ounces sold, productivity improvements and cost-reduction initiatives. In the Americas, Kinross also operates Fort Knox, Kettle River-Buckhorn, Paracatu and Maricunga. The company also mines in Russia and West Africa.

• Adjusted operating cash flow: $364.2 million, compared with $211.6 million in Q4 2016. • Reported net earnings/loss: reported net earnings3 of $217.6 million, or $0.17 per share, compared with a net loss of $116.5 million, or $0.09 per share, in Q4 2016. • Adjusted net earnings/loss: Adjusted net earnings of $16.3 million, or $0.01 per share, compared with an adjusted net loss of $50.9 million, or $0.04 per share, in Q4 2016.

2017 fourth-quarter highlights

• Production: 652,710 gold equivalent ounces, compared with 746,291 Au eq. oz. in Q4 2016. • Reve n u e : $ 8 1 0.3 m i l l i o n , compared with $902.8 million in Q4 2016. • Production cost of sales: $653 per Au eq. oz., compared with $712 in Q4 2016. • All-in sustaining cost: $1,019 per Au eq. oz. sold, compared with $1,012 in Q4 2016. All-in sustaining cost per gold ounce sold on a by-product basis was $1,013 in Q4 2017, compared with $1,010 in Q4 2016. • Operating cash flow: $366.4 million, compared with $302.6 million in Q4 2016.

Klondex Mines Ltd.

VA N C O U V E R , B C — Klondex Mines Ltd. reported Feb. 1 its preliminary operating results for the fourth quarter and full-year 2017.

• Fire Creek and Midas delivered gold equivalent ounces production in-line with guidance • Sold 190,865 gold equivalent ounces, an increase of 20 percent from 159,118 gold equivalent ounces sold during 2016

Fire Creek The Fire Creek mine continues to excel and performed in line with guidance for the year. For the fourth quarter, 28,162 tons at a grade of 0.76 AuEq opt were mined at Fire Creek. For the year, 123,754 tons at a grade of 0.90 AuEq opt were mined. Fourth quarter and year-to-date recovered gold equivalent ounces were 21,180 and 108,126, respectively. Sold ounces for the same periods were 25,420 and 112,455 gold equivalent ounces as metal inventories were depleted during the year.

Midas The Midas mine also per• Mined 222,233 gold equiva- formed in line with guidance lent ounces for the year. For the quarter, • Produced 189,456 gold equivalent ounces, an increase of 17 percent 37,454 tons at a grade of 0.36 2017 operating results

from 161,289 gold equivalent ounces produced during 2016

See Reports, 75

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72 • MINING QUARTERLY, SPRING 2018

COLUMN

Impact of tax reform on mining

O

ne of the big questions in the mining world of late has been: How will the new tax reform legislation affect our operations? I thought I would use this column to give my take on what we might expect to see in the coming years as the issues are sorted out. As you might recall, President Donald Trump signed the Tax Cuts and Jobs Act (TCJA) on Dec. 22 last year after the House and Senate came DANNY to a compromise TAYLOR agreement. The final bill has, as usual, different rules for individuals versus corporations. Since most of the larger operations are corporate ventures (C-corps), I will focus on those issues, with a few sidebars regarding taxation of individuals including Partnerships, LLCs and S-corps. The most important change for corporations is the decrease of the maximum tax rate from 35 percent to 21 percent, effective for tax years beginning after Dec. 31, 2017. All else being equal, this should reduce overall expenses for mining operations and increase free cash flow. Running this change through a few models that I have developed for clients over the years, I found that for short- to medium-term projects (5-10 years) the Discounted Cash Flow Rate of Return (DCFROR) impact of the tax rate cut was between 3 to 7 percentage points, which I found to be equivalent to about a 5 percent

to 9 percent increase in gross revenue. Given a current gold price of about $1,300 per ounce, the effect would be the same as an increase of from $65 to $120 per ounce. Probably the second-most impactful provision on cash flow is the full expensing of capital expenditures also called 100 percent bonus depreciation. Normally, big ticket items (think haul trucks and loaders) must be deducted for tax purposes over the life of the equipment through a depreciation deduction. The impact of that is to cause companies to pay higher taxes in the early years when the capital cost is incurred. Moving the deductible expenditures into the year the cost is made means the payback of the costs through decreased taxes occurs earlier, and thereby the DCF-ROR improves along with the free cash flow in the earlier years. Depending on the relative size of the capital costs to the total operational cash flow, the impact of this change on DCF-ROR in my models was about the same as the impact of the reduction in the tax rate, mostly due to the fact that mining operations are very capital intensive. Interestingly, when the two changes are combined (tax rate change and 100 percent bonus depreciation) the effects are not completely additive. In one model, the rate change generated an increase in return of 3.8 percentage points, and the depreciation change showed at 4.1 point increase under the old (35 percent) rate. However, when the two were combined, the joint impact was only a 6.1 point advantage. The lower tax rate decreases the impact of the

early write-off. The third change that ties this together for mining operations is the removal of the Alternative Minimum Tax (AMT) for corporations. AMT is a provision in the tax code that limits the deductibility of certain “tax preference items,” such as percentage depletion and accelerated depreciation (both of which are of major importance to mining operations. The TCJA repeals the AMT for corporations, although it still applies to individual taxpayers. Without that repeal, the positive effects of the 100 percent bonus depreciation would have been diminished. Also notice that the percentage depletion allowance remains unchanged for both corporations and individuals. All in all, the TCJA appears to have a lot of goodies for mining companies. The question is: What will be the day-to-day impact? What will the companies do with their newfound cash flows? I offer the following observations: • The most likely place that the new cash flow will be utilized is in expansion projects. Decreased tax costs are equivalent to increased metal prices. That means that cut-off grades will go down, and resource tons can be moved into the reserve category. I look for an increase in drilling programs and expansion of existing operations to exploit newly created reserves. Note that because the 100 percent bonus depreciation phases out starting in 2023, there will be some urgency to get the capital expenses in quickly. Therefore because of this time limit, I expect more in the way of

ramp-up expansion rather than entirely new operations with long lead times. We probably will not see wage increases. Mining jobs are already at the top of the pay scale in the U.S. (and abroad). On the other hand, the expansion projects mentioned above will need staffing, so I do look forward to increased employment, which will increase demand for skilled workers and could have a positive impact on wages as the industry is already facing labor shortages. • There are also some negative provisions in TCJA that will affect our industry. On the negative side, there is a cap on how much interest can be deducted (30 percent of net earnings) and a limit on operating loss carry forward (80 percent of taxable income). And there is one provision I am still researching: The law eliminates the deductibility of “transportation or commuting expenses of employees.” This could have an impact on “taking the bus to work.” We’ll have to see how this pans out. Meanwhile, “Keep on Muckin’.”

Mining consultant and professional engineer Dr. Danny Taylor is an industry expert specializing in mine operation economic analysis. He retired from the University of Nevada, Reno, in 2017 after 37 years of teaching and leadership. The UNR chairman emeritus holds a bachelor’s degree in mining and mineral engineering, master’s degree in operations research and doctorate in mineral economics. His business is Pairadocs Consulting Inc.


SPRING 2018 ELKO DAILY FREE PRESS, Elko, Nevada • 73

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74 • MINING QUARTERLY, SPRING 2018

COLUMN

NvMA revamps website

I

n the 21st century, people have come to rely on a wide variety of sources for information, including social media channels and online platforms. For entities that provide information, a digital presence is absolutely mandatory. For organizations like the Nevada Mining Association, which seek to provide responsible and reliable data, it is especially important for that digital presence to be robust and engaging. The digital universe changes DANA quickly, and BENNETT NvMA is pleased to announce the launch of its newly redesigned website. Located at the same address — NevadaMining.org — the NvMA has been completely overhauled. It is the first reset of our website in nearly 10 years. The site now offers quick and easy access to essential mining information and a clean, uncluttered design that incorporates improved navigation, enhanced functionality and dynamic content. If you want to take a virtual mine tour from your phone, you can do that. If you operate a business that’s considering becoming part of the mining supply chain, you can gather key data for decision-making. If you have students looking to research Nevada’s mining industry, they can do that on our website, too. We are particularly proud of the new online features geared toward students and teachers. The site contains easy-to-implement lesson plans that meet Nevada’s

The Nevada Mining Association updated its website.

standards for science, technology, engineering and math, descriptions of the many minerals produced here in Nevada, and even a career pathways page where future miners can start planning their education for their work in the industry. These exciting new features join the popular content that our regular web-based visitors are used to seeing. Great data and detailed reports about the state’s 21st-century mining industry are now just a click away. The Nevada mining job board remains a one-stop shop for up-to-date career postings. And you can still watch the award-winning PBS documentary about the role of the mining industry in the Silver State’s history, culture and future. The odds are that if you are reading this, you may

already be a member of NvMA. Our new site offers a slew of members-only features, aimed at fulfilling your company’s needs for the latest information about the industry. This robust section of the website will ensure that NvMA stays at the cutting edge of providing our members with innovative and engaging business-to-business opportunities. Whether you are a member or not, we invite you to explore the new site and experience all the exciting features at NevadaMining.org. If you would like to join the 400plus companies that comprise NvMA, be sure to click over to the membership page and learn about the many membership benefits. The Nevada Mining Association’s new website will be updated frequently, so we

encourage you to check back often. Whether you are deeply involved in the mining industry, simply curious about it, or somewhere in between, our new website offers plenty for everyone to learn and explore. We always welcome feedback, so please don’t hesitate to send us compliments or suggestions. You can contact us directly on the site, right from the main page. We look forward to hearing from you!

Dana Bennett is the president of the Nevada Mining Association, established more than 100 years ago. NvMA now debates policy matters in the state legislature and local governments, unites the voice of the industry in public relations, and leads the industry’s efforts in the community for its 400-plus members.


ELKO DAILY FREE PRESS, Elko, Nevada • 75

Reports From 71

AuEq opt were mined at Midas. For the year, 156,927 tons at a grade of 0.33 AuEq opt were mined. Fourth quarter and YTD recovered gold equivalent ounces were 10,371 and 45,062, respectively. Sold ounces for the same periods were 10,512 and 47,298 gold equivalent ounces as metal inventories depleted throughout the year.

YTD recovered gold equivalent ounces were 5,914 and 7,371, respectively. Sold ounces for the same periods were 4,752 and 5,281 gold equivalent ounces. Stockpiles at the end of 2017 contained approximately 15,000 gold equivalent ounces from 44,000 tons at a GEO grade of 0.40 opt.

Newmont Mining Corp.

DENVER — Newmont Mining Corp. announced full year Hollister and fourth quarter 2017 results The Hollister mine had its that demonstrated improved best quarter of mining in the operational and financial perfourth quarter, mining over formance. 9,000 gold equivalent ounces, Full year 2017 summary as the majority of the under• Net income (loss): Delivered full ground rehab was completed year GAAP net income (loss) from in the third quarter and devel- continuing operations attributable opment was advanced provid- to stockholders of $(60) million or ing additional access to the $(0.11) per diluted share; delivered Gloria vein. For the quarter, adjusted net income of $780 million or $1.46 per diluted share, up 26 perHollister mined 20,440 tons cent compared to the prior year at a grade of 0.44 AuEq opt. • EBITDA: Generated $2.7 billion For the year, Hollister mined in adjusted EBITDA2, up 12 percent 66,453 tons at a grade of 0.38 compared to the prior year • Cash flow: Reported AuEq opt. Fourth quarter and

consolidated operating cash flow from continuing operations of $2.4 billion, up 22 percent from the prior year, and free cash flow of $1.5 billion, up 88 percent from the prior year • Gold costs applicable to sales (CAS): Reported CAS of $691 per ounce, in line with full year guidance • Gold all-in sustaining costs (AISC)5: Reported AISC of $924 per ounce, in line with full year guidance • Attributable gold production: Produced 5.3 million ounces of gold, up eight percent from the prior year, in line with full year guidance • Po r t fo l i o i m p rove m e n ts : Declared commercial production at the Tanami Expansion Project and approved the Tanami Power Project in Australia; achieved a full year of underground operation at Northwest Exodus and mined first ore at the Twin Creeks Underground mine in Nevada; approved and progressed expansion of the Ahafo Mill and produced first gold at Subika Underground in Africa; completed first full year of operations at Merian in Suriname; approved Quecher Main and increased ownership in Yanacocha in Peru; invested in early stage development projects in the Canadian Yukon, Colombia, Guiana Shield and the Andes; declared gold reserves of 68.5 million ounces, fully replacing depletion at a constant gold price,

and increased gold resources6 to 48.2 million ounces • Financial strength: Reduced net debt to $0.8 billion, ending the year with $3.3 billion cash on hand, and an industry leading, investment-grade credit profile; fourth quarter dividend declared raised to $0.14 per share, nearly three times higher than the prior year quarter • Outlook: Released improved 2018 guidance at Investor Day for attributable production, CAS per ounce and AISC per ounce; increased 2018 capital outlook by $300 million following approval of the Tanami Power Project and the Turquoise Ridge Joint Venture Mine Optimization Project

Fourth quarter 2017 summary • Net income (loss): Delivered

GAAP Net income (loss) from continuing operations attributable to stockholders of $(534) million or $(0.99) diluted share; adjusted net income was $216 million or $0.40 per diluted share, up 60 percent from the prior year quarter • EBITDA: Generated $736 million in adjusted EBITDA, up 17 percent from the prior year quarter • Cash flow: Increased consolidated operating cash flow from See Reports, 79

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76 • MINING QUARTERLY, SPRING 2018

COLUMN

Innovating safety

O

ne of the stories I like well in Shane Snow’s book, Smart Cuts, is about the Hospital Surgical Center applying NASCAR principles in its operating room procedure. I remember that when I read it, I had an epiphany as to why some culture change/behaviorbased safety programs have failed and others had thrived. My mind shifted to a story I heard Dr. Thomas E. Boyce recount about a site he had worked with that lacked the administrative support for their BBS ADRIA PULIZZANO steering group. In fact, that subject (a lack of administrative support) can be one of the major stumbling blocks to successfully implementing any employeeled steering team process. In the story of NASCAR being applied to surgical room, the team successfully figured out the administrative aspects of the process, including where to physically place their supplies (including computers) so that their performance of work became seamless. In the surgical room, the result of proper administration was more efficient performance and more lives saved. Such planning often requires more than one attempt and a commitment to gathering data. Many mine sites and other organizations simply do not have time nor space nor commitment. At one site, our client said they would dedicate a room and an admin to the

process. That’s less common than it should be. At another client (likely because the team became “the admin”), their dedicated computer or iPad for data collection was placed in the open in a space where they transitioned from one task to another (as in the operating room story). The fact that some accidents or injuries occur when some are transitioning from one task to another has not been lost on me. This is relevant for those in offshore oil where the injury rate has reported to have been seven times higher than another American profession – not on the rig itself – but while traveling from the main land to the platform! Thus, doing something about “safety” in between one task and another is critical. Several years after I read Smart Cuts, I found myself attending a presentation from a NASCAR guy who had innovated the performance of those who were waiting behind the wall to change the tires. Since the speaker had been a former football player, he applied the sports mindset/ principles thinking to the task at hand and wound up innovating the industry by routinely helping pit crews save several seconds of time at each pit stop. While the man recounted the story, and showed a brief video, I vividly imagined the scene and saw another innovation that would likely save even more time without compromising safety. One thing I always ask myself when I want to innovate is: Why wait for ____________________ (fill in the blank) when you can just ____________________

(fill in the blank)? Did you do it? What came to your mind? This process worked for me when I was managing apartments. We would always wait to do a move out inspection. By the time that happened, the tenant did not have time to make repairs but was caught in a situation where they didn’t realize they would be charged so much money for the condition of the apartment. As a result, I thought: why wait (for) to do move out inspections when you can (just) simply do a preliminary move out inspection and let a person know in advance what they will be charged if a certain repair (for example, carpet cleaning) was not done by the date of the final inspection. I created a “preliminary move out inspection sheet.” This worked well for us and those who had been living in a space for even five or more years, or who had many roommates. The result was less time for the maintenance staff to organize the maintenance and repair, and less surprising cost to the tenant. When I shared this story with Dr. Boyce, he reminded me that preplanning work, preventive maintenance of equipment, and regular job hazard analyses are all correlated with lower injury rates in mining and other industries. He further explained that a foundation of observing behaviors is the leading indicator of the potential for injury. To quote him, “Why wait for an injury to trigger a process adjustment or safety innovation when you can

“Why wait for an injury to trigger a process adjustment or safety innovation when you can simply observe what people are doing and adjust today?” — Thomas E. Boyce, P.h.D., president and senior consultant, Center for Behavioral Safety

simply observe what people are doing and adjust today (before the injury occurs)?” This has been his mantra for nearly 25 years now. If you like this article, Dr. Boyce and I request that you share it with someone who works in mining and someone who works outside of mining where the injury rates are higher. Do you know what those professions are? They are forestry, agriculture and transportation. In fact, any miner in a successful culture change/behavior based safety program ought to have a “brother” or counterpart in another dangerous profession that you can share information and innovations with. Dr. Boyce reminds his audiences of a poem that starts: “I could have saved a life today, but chose to look the other way …” How would you feel if you, too, were able to save a life?

About the Boss: Dr. Thomas E. “Ted” Boyce is president and senior consultant with the Center for Behavioral Safety LLC. Learn more at www.cbsafety. com or contact him at ted. Boyce boyce@cbsafety. com. He thanks his business manager, Adria, for writing this quarter’s submission. Continue this conversation by sharing Mining Quarterly articles on Facebook.


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78 • MINING QUARTERLY, SPRING 2018

COLUMN

Next commodity price cycle

I

n an article about a year ago, we addressed the “Boom-Bust” nature of the minerals industry with focus on the causes of this characteristic, which, we noted, are basically rooted in fluctuations in the larger economy. The logic is simple: It starts with a shock to the economy caused by wars, natural disasters, etc. This results in changes in consumption, capital investment and/or govJOHN ernment spendDOBRA ing that become the transmission mechanism for changes in commodity prices. Fine. But how does this help us going forward? To put it simply, to understand where you are going, you need to know where you are and how you got there. We know, for example, that over the past four decades, there have been three major bull markets (i.e., periods of rising prices) in commodities. The most recent of these — sometimes called the “Super Cycle” while it was underway — occurred in the early 2000s until the 2008-2009 market crash. The graph shows mineral commodity prices during and beyond this period. Prices of these “industrial commodities” basically quadrupled up until the crash in 2009, driven by industrial demand for raw materials. The market rebounded quickly in 2010 because central banks were able to contain the contagion to financial markets and commodity producers and consumers were able to complete contracts and deliver

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contracted goods and services. But, the subsequent multiyear decline in prices that followed suggested that the financial collapse had kicked the wind out of the markets. Even the gold market: Gold prices did not collapse in the 2008-2009 financial meltdown because it was considered a financial safe haven. However, it peaked two years later and has yet to see the $1,800 level again. But, what led up to the “Super Cycle”? Basically, a surge in emerging market economies prompted a surge in demand for basic commodities. At this point, the term “BRICs” entered our lexicon – an acronym for Brazil, India and China – three large, developing nations that account for over one-third of the earth’s population. During the “Super Cycle,” these (and other) developing countries experienced double-digit rates of growth in GDP compared to 2 percent or less in the developed economies of North America and Europe. The significance of these growth rate differentials for the commodity price cycle is fairly straight forward. Growth in developed economies, which are

service based, increases demand for services requiring human inputs. Think of a company like Amazon, besides the stuff you get delivered from them, what are they selling? Primarily logistics—getting the stuff to you cheaply and quickly, and logistics is a human skill (a plug for STEM educations). In developing economies, growth and rising incomes lead to a demand for “stuff” — public infrastructure like roads, bridges, sanitation systems. And, consumer goods where the major inputs are basic materials like iron, copper, and the whole range of industrial commodities. We may live in an information age in the developed world, but the vast majority of the world’s population still wants “stuff,” and that requires raw materials. Historically, the spark that sets off growth in developing markets has been growth in the developed world. On this point, the consensus is fairly positive. The International Monetary Fund, World Bank, and others are projecting robust growth in North America and Europe compared to the post-recession decade. The same forecasters are predicting an even stronger rebound for the

“BRICs” and other developing countries. All this is pointing to a new commodity cycle. We’ll have to wait and see, but the preconditions are here. Finally, if you are interested in exploring the implications of this trend and possibly profiting from it, there are a number of exchange traded funds (ETFs) that hold stocks in companies positioned to profit from it. There are a fair number of ETFs to choose from with varying emphases on regions and industries. A small sample (without recommendation of any in or not in the group are XLB – SPDR basic materials fund, CHIM – China basic materials fund, and MXI – global basic materials fund. These and other options can be found by visiting your favorite search engine.

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


ELKO DAILY FREE PRESS, Elko, Nevada • 79

Reports From 75

continuing operations to $754 million, up 28 percent from the prior year quarter; and increased free cash flow to $445 million, up 54 percent from the prior year quarter • Gold CAS per ounce: Rose 2 percent to $693 per ounce • Gold AISC per ounce: Rose 5 percent to $968 per ounce • Production: Produced 1.3 million attributable gold ounces • Shareholder returns: Nearly tripled the fourth quarter dividend declared to $0.14 per share compared to the prior year quarter

SSR Mining Inc.

‌VANCOUVER — Quarterly gold production at SSR Mining Inc.’s Nevada mine rose in the fourth quarter of 2017, the company reported in results released mid-January. Overall, SSR met or exceeded its initial guidance for the sixth consecutive year. At the open pit heap leach Marigold mine in Valmy, gold production in the fourth quarter of 2017 totaled 52,768

ounces, 36 percent higher than the previous quarter. Gold sales totaled 51,420 ounces for the quarter. For the year, total gold production decreased 1.4 percent, and sales were down 2 percent compared to 2016. Material mined during the year totaled 69 million tons, 8 percent lower compared to the record tonnage moved in 2016, due to adverse weather conditions in the first quarter of 2017 and a lower mining rate in the fourth quarter as discussed below. The mine achieved a record 25.6 million tons of ore stacked on leach pads in 2017. A total of 14 million tons of material were mined in the fourth quarter, down 31 percent from the third quarter due to planned maintenance of the rope shovel, and operational shutdowns and interruptions resulting from the fatal incident in October. The operation focused on addressing the leaching constraints related to clay ore encountered in the second half

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of the year. Multiple actions were implemented resulting in improvement of the leach pad operation over the last three months of the year. A combination of ore blending, adding surfactants to reduce ponding and improving ripping practices have allowed solution application rates to return to normal and recovery rates to expected levels. This was reflected in the increased gold production in the fourth quarter. Approximately 5.8 million tons of ore were delivered to the heap leach pads at a gold grade of 0.37 grams per ton in the fourth quarter. This compares to 7.2 million tons of ore delivered to the leach pads at a gold grade of 0.31 grams per ton in the third quarter. Gold grade mined in the fourth quarter was 19 percent higher than the third quarter due to mining deeper in the current phase of the Mackay pit. The strip ratio declined to 1.4:1 in the quarter, a 22 percent reduction compared to the

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previous quarter. SSR also operates mines at Seabee in Canada and Puna in Argentina. Total production for the company was 202,240 ounces of gold in 2017. This compares to 205,116 ounces of gold produced in 2016. Gold sales were 200,192 ounces for the year. “These results are driven by our teams and their continued focus on Operational Excellence to optimize our operations,” said Paul Benson, SSR president and CEO.” In the year ahead, we are positioning the company to grow production as Seabee ramps up and the Chinchillas deposit comes on-line in Argentina. Importantly, our exceptionally strong balance sheet enables us to increase our investment in brownfields exploration at both Marigold and Seabee.”

Visit www.miningquarterly. com for more detailed fourth-quarter reports and results from additional area mining companies.

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80 • MINING QUARTERLY, SPRING 2018

FEATURE

Mining Families Photo contest winners

SUZANNE FEATHERSTON Mining Quarterly editor‌

‌In their entries to the spring 2018 photo contest, Mining Quarterly readers show that a mining family is just what it sounds like: family. Thank you to all who participated, and congratulations to the four winners!

Summer 2018 Photo Contest Cody, Shawn and Dale Cosper, from left, represent three out of four generations of underground mine workers. Dale’s late father also worked underground.

Theme: Hard hats Submission deadline: May 10 Send entries to mining@elkodaily.com

Like us on Facebook for the latest news and features on northeastern Nevada’s important mining industry.

www.Facebook.com/MiningQuarterly .Facebook.com/MiningQuarterly


ELKO DAILY FREE PRESS, Elko, Nevada • 81

WARREN ZELMAN PHOTOGRAPHY‌

Justin Whetten, Barrick Gold Corp. PDM mechanic at Goldstrike, and Christine Whetten, Kinross Bald Mountain HR manager, are a husband-andwife mining duo. ABOVE: Vance Ruffino, 6, visits his dad, Thomas Ruffino, at Barrick Gold Corp.’s Cortez District operations during “family days” in summer 2017. “He was able to see his dad not only at work but understand the importance his dad’s career has,” says his mom, Ashley Ruffino. “He also learned how important mining is not only for our community but our country.” LEFT: Brothers Lonnie Armknecht, left, mine ops general foreman; and Cary Armknecht, projects supervisor, have worked together at Kinross Bald Mountain since 1985.


82 • MINING QUARTERLY, Elko, Nevada SPRING 2018

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ELKO DAILY FREE PRESS, Elko, Nevada • 83

HISTORY

Back to Bullion

SUZANNE FEATHERSTON Mining Quarterly editor‌

‌Not even a ghost town remains on Bunker Hill southwest of Elko almost 150 years since the first silver mining began. Where operations collectively produced millions of dollars in metals, there rests only scattered wooden buildings with caved roofs and a buckshot-splattered post-modern camper. The scene in the Railroad Mining District during the early 1870s, however, would have bustled with activity while workers conducted operations in mines on the east side of the hill, according to Nevada Ghost Towns and Mining Camps, a book by Stanley W. Paher published in 1970. In the nearby Highland camp at an elevation of about 8,400 feet, a hotel, assay office, store, butcher shop and stables went up, while Bullion City came to be 2 miles east. Empire City Mining Co. reportedly took over operations in 1872 and built a blast furnace, according to the book, then a San Francisco firm built a smelter. Production in silver, lead, copper and gold produced about $3 million over 14 years before mining stopped in 1886 or 1887. Tunneling totaled 7,000 feet, Paher wrote. Early Elko-area rancher Peter James Ogilvie, from Utah, worked 1885-1886 in the district, “which was booming at the time,” he wrote in an autobiography published in a 1993 Northeastern Nevada Historical Society Quarterly. Ogilvie reported that the superintendent was inexperienced in smelting. “Much of the

NORTHEASTERN NEVADA MUSEUM‌

Bullion Mine, circa 1870s

SUZANNE FEATHERSTON

A wintry view from a hilltop above the former Bullion Mine, active in the late 1800s

material was lost, going out in the slag,” he wrote. “This bankrupted the company.” The mines reopened in 1904

report by Victor Goodwin for the U.S. Forest Service, part of which was reprinted by the Northeastern Nevada Historical Society Quarterly in 2006. Nevada Bunker Hill Mining Co. and successors also extracted limited amounts of ore intermittently for next 60 years, Paher wrote. Local lore rumors that in recent years a man lived in the travel trailer near the old mine among the mountain mahoganies. The residence has been abandoned and decays in the elements. Although surrounded by a patchwork of Bureau of Land Management land, the property is private.

in conjunction with a new camp called Bullion, according to the Visit www.miningquarterly. book. World War I also spurred com for a slideshow of vintage production, according to a 1960 and modern photos.


3D CONCRETE, INC.........................................71

DONALD j BIRAK CONSULTING.....................52

4OCG...............................................................71

ELKO CONVENTION &VISITORSAUTHORITY....15

A PLUS TOTAL CARE.........................................9

ELKO DAILY FREE PRESS ...............................80

ALS MINERALS...............................................67

ELKO DAILY FREE PRESS ...............................77

AMERICAN STAFFING, INC ............................55

ELKO TOOL AND FASTENER...........................52

AMES CONSTRUCTION ...................................75

ELKO WIRE ROPE & MINING SUPPLY.............87

ARNOLD MACHINERY ....................................63

EM STRATEGIES .............................................42

ASGCO MANUFACTURING .............................69

FIRST DRILLING GROUP................................60

BAYMONT INN & SUITES ..................................9

FLOW CONTROL EQUIPMENT........................48

BEL-RAY .........................................................11

FORD STEEL...................................................12

BOSS TANKS....................................................67

FORDIA USA ...................................................47

BRIDGESTONE AMERICA ...............................65

GALLAGHER FORD ........................................47

BROADBENT & ASSOCIATES ...........................65

GEOSTABILIZATION .......................................55

CARLIN TREND ..............................................46

GOLDER ASSOCIATES INTERNATIONAL ........46

CASHMAN EQUIPMENT....................................7

GRANITE CONSTRUCTION .............................41

CASHMAN EQUIPMENT..................................86

GRAYMONT ....................................................46

CATE INDUSTRIAL .........................................73

GREAT BASIN INDUSTRIAL............................20

CEMENTATION USA INC. ................................79

GREATER NV CREDIT UNION ........................13

COACH USA/ELKO INC. ..................................88

HAMPTON INN ...............................................61

COMPRESSOR PUMP & SERVICE, INC.............10

HANLON ENGINEERING ................................60

DMC MINING SERVICE ...................................52

HIGH MARK CONSTRUCTION.........................49


I & E ELECTRIC INC ......................................... 42

RAM ENTERPRISE INC .................................... 31

IDS NORTH AMERICA ...................................... 39

RAPID TRANSPORT, LLC ................................. 24

J.S. REDPATH CORP ......................................... 35 JENTECH DRILLING SUPPLY .......................... 56 KGHM / ROBINSON NV MINING CO. ................ 53

RED LION ..........................................................1 RED LION ........................................................ 43

KNIGHT PIESOLD CONSULTING ..................... 34

REDI SERVICES LLC......................................... 29

KOMATSU EQUIPMENT .....................................2

S&G ELECTRIC MOTOR REPAIR....................... 16

LEDCOR........................................................... 36 LEGARZA EXPLORATION................................ 37 LIEBHERR USA ............................................... 34

SACRISON ENGINEERING ............................... 24 SAS GLOBAL MINING CORP. ........................... 5 1

NA DEGERSTROM ........................................... 22

SIERRA FREIGHTLINER.................................. 24

NEWFIELDS..................................................... 30

SMALL MINE DEVELOPMENT......................... 25

NEWMONT....................................................... 57

SNYDER MECHANICAL ................................... 19

NORTHERN NEVADA EQUIPMENT.................. 35 NV AERIAL & GROUND PRODUCTIONS........... 26 OPEN LOOP ENERGY ...................................... 20

SRK CONSULTING ........................................... 16 SWCA ENVIRONMENTAL CONSULTANTS........ 22

ORMAZA CONSTRUCTION ............................... 20

THYSSEN MINING INC..................................... 23

PILOT THOMAS................................................ 33

TONATEC EXPLORATION................................ 20

PLUMBLINE..................................................... 14 POLELINE CONTRACTORS .............................. 33 PRAY & COMPANY ........................................... 70

VOGUE SERVICES ............................................ 21 VOGUE SERVICES ............................................ 79

PRIEST ELECTRIC ........................................... 26

WESTERN INDUSTRIAL PARTS INC................. 18

Q & D CONSTRUCTION..................................... 17

ZGA ARCHITECTS & PLANNERS ...................... 18


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Mining Quarterly — Spring 2018  

Evolving mine technology in the Cortez District, results after one year at Long Canyon, the EPA administrator's visit and construction of th...

Mining Quarterly — Spring 2018  

Evolving mine technology in the Cortez District, results after one year at Long Canyon, the EPA administrator's visit and construction of th...

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