Mining Quarterly - Summer 2019 by Elko Daily

UARTERLY SUMMER 2019

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TOP STORIES Legacy Fund

A promise to continue the tradition .........................Page 12

Resource exploration Spending is up 31% in Nevada ...................... Page 54

Elko Mining Expo

Thousands come to Elko for big event .......... Page 62

ON THE COVER Newmont’s Phoenix Mine southwest of Battle Mountain is one of the mines which will be joining the Barrick-Newmont Nevada Gold Mines joint venture. Nevada Gold Mines will be the world’s largest gold producing complex. Photo by Tim Burmeister More contents on ........Page 4

FROM THE EDITOR

My introduction to mining ‌I became the new editor of the Mining Quarterly in February, and was plunged right into the thick of things reporting on the back and forth battles between Barrick and Newmont as the two TIM behemoths BURMEISTER rumbled along a road that soon led to the decision to form a joint venture called Nevada Gold Mines. It seems that gold has always been in the background of my life. I was born and raised in the Golden State. Then I moved to northcentral Montana, and for many years I was the editor and then the owner of a small-town weekly newspaper in the heart of the Golden Triangle. The region got its name because it is one of the top wheat producing areas in the country. (By the way, the town where I owned the newspaper just got its first brewery: Golden Triangle Brew Co.) Then life brought me here to Elko, and now I am surrounded

by gold that is not just metaphorical or the color of the plants in the fields. Here there is a lot of real gold in the land. I started working at the Elko Daily Free Press and the Mining Quarterly on Feb. 18, and on that very day the rumor arrived in the newsroom that Barrick was talking about a hostile takeover of Newmont. One week later, on Feb. 25, the hostile takeover proposal became official. There was a lot to learn and plenty of news to sort through as the story developed. Two weeks later, on March 11, Barrick Chief Executive Officer Mark Bristow was in Elko to announce that Barrick and Newmont had agreed to form a joint venture for their mines in Nevada. When I sat down with Bristow for an interview, I thanked him for providing me with big news to cover as I got started in my new job. There has been plenty to report as the development of the joint venture has progressed, but as I have gotten rolling at the Mining Quarterly and have visited some mines, I have found that

there is a vast array of interesting things to learn and write about. I did not know much about mines before this. I drove by and looked over at the big open pit on the edge of Butte, Montana, many times, but other than that, there were no mines around me where I lived in California and Montana. Mining involves an encyclopedic variety of knowledge and sciences. Sort of like the widening range between the growing size of the mining machinery and the shrinking size of the gold that is harvested, there is a huge range of topics to cover. Here are just a few short notes on some mining topics I have started to learn a little bit about: Geology: For multitudes of years, geological events have shaped the land and created the resources we have in Nevada today. Chemistry: In my story on the Phoenix Mine, I give a short summary of the series of steps that are used to extract copper sheets from waste soil. Chemists must have put some See Editor, 18

4 • MINING QUARTERLY • SUMMER 2019

CONTENTS

FEATURES

‌BUSINESS AMS of the Southwest .................................................................Page 64

Phoenix stays productive PAGE 20

COMMUNITY Mackay, Newmont partnership ...................................................Page 46

EXPLORATION Exploration project updates ........................................................Page 38

GOVERNMENT 12.5% hardrock mining royalty proposed ..................................Page 42

INDUSTRY Industry specialist outlines projects ........................................... Page 16 Premier optimistic about McCoy-Cove ......................................Page 48 Companies report Q1 results ....................................................... Page 77

Round Mountain expansion PAGE 28

MARKETING Nevada markets its exploration potential ..................................Page 59

PEOPLE Zinke joins board of Elko-based U.S. Gold Corp. ........................Page 44 Salute to Women of Achievement ...............................................Page 52

SAFETY MHSA investigating Gold Bar fatality ..........................................Page 94

COLUMNS Pullizano: Hybrid vigor: training and development .................... Page 67 Dobra: More on tariffs .................................................................. Page 72 NvMA: The importance of the supply chain ............................... Page 75

ONLINE EXTRAS

Women’s Mining Coalition PAGE 41

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

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

Mining Gear PAGE 90

ELKO DAILY FREE PRESS, Elko, Nevada • 5

COVER STORY

TIM BURMEISTER, ELKO DAILY FREE PRESS‌

Barrick President and Chief Executive Officer Mark Bristow speaks March 11 at the Western Folklife Center in Elko to announce his company’s joint venture with Newmont Mining Corp. Seated at the table beside him are, from left, Elko County Manager Rob Stokes, Great Basin College Foundation Director Matt McCarty, Elko Mayor Reece Keener, Elko Police Chief Ben Reed, and Elko City Councilman Robert Schmidtlein.

“This is huge”

Joint venture creates world’s largest gold producing complex

Newmont Mining, the two big, longtime players in mining in the region, after many years of dancing around the possibility of joining together in one way or STORY AND PHOTOS BY another, finally agreed to form a TIM BURMEISTER Mining Quarterly editor‌ joint venture to work together on mining their Nevada assets. his is huge,” Newmont When it finally happened, it Goldcorp Regional happened fairly quickly. Senior Vice President Andrew Woodley said at A quick history a Barrick-Newmont joint venIn the fall of 2018, Randgold ture update reception in Elko on Resources, an Africa-focused gold mining company, agreed to May 9. These past six months have an all-share merger with Barrick. been a time of huge news in The merger went into effect Jan. the mining industry in north- 1 of this year, and Randgold CEO ern Nevada. Barrick Gold and Mark Bristow became the new

‌“T

CEO of Barrick. According to a March 18 article by Gabriel Friedman in the Financial Post, in January Bristow and Newmont CEO Gary Goldberg corresponded about the possibility of working together in Nevada in some way. “We had favorable email exchanges right until the end of January,” Goldberg said. In the meantime, Newmont had been working toward a merger with Goldcorp, another large gold company with mines in Canada, Mexico and Central and South America. In January, Newmont announced a proposal to pay a 17 percent premium for

Goldcorp. Newmont’s share price dropped 11 percent the day the deal was announced. The Financial Post story reported that “Bristow said the poor reaction created an opportunity and he pounced.” On Feb. 25, Barrick announced an $18 billion hostile all-share negative premium bid to take over Newmont. Things got a little ugly for a little while after that. Newmont’s board unanimously rejected the proposal, and Goldberg called the takeover offer “desperate” and “bizarre.” See Joint venture, 6

6 • MINING QUARTERLY • SUMMER 2019

Joint venture

the largest gold producer in the world. In the merger announcement, Newmont Goldcorp said it is targeting six to seven million ounces of steady annual gold production over a decades-long time horizon.

From 5

Bristow said the deal made sense because of the $4.7 billion in savings from synergies the companies would see in Nevada over the next 20 years. Newmont submitted a joint venture proposal to Barrick that would encompass the two companies’ Nevada operations. A presentation on Barrick’s website said, “Negotiations with Newmont over the years have not been fruitful and do not give us confidence that a suitable JV or similar transaction can be implemented.” But then on March 5, two weeks after the hostile takeover bid, Bristow flew to New York and met with Goldberg to talk about the possibility of a joint venture in Nevada. “I told him we can do this, but the drop dead date is Sunday,” Bristow said. That was on a Tuesday. The next day, Goldberg and his Newmont team met with Bristow again. The paperwork for a joint venture was put together in time for a Sunday night signing. The next morning, March 11, Bristow was in Elko for a breakfast reception to announce the joint venture to the community.

Some JV details BARRICK GOLD CORP.‌

This graphic from Barrick shows how the Nevada Complex, if it was ranked as a gold company, would be the third largest behind Barrick and Newmont.

Gold Mines. The mines in the joint venture will include Barrick’s Cortez, Goldrush, Goldstrike, Turquoise Ridge, and South Arturo, and Newmont’s Carlin, Long Canyon, Phoenix, Twin Creeks and Lone Tree. These mines produced a total of just over four million ounces of gold last year. “That makes this the largest single gold producing complex in the world by a magnitude,” Bristow said. “The next biggest is just under two million ounces. So it’s very significant.” In second place is the Olimpiada Mine in central east Siberia in Russia, which produces 1.3 million ounces of gold. Nevada Gold Mines, if it was ranked as a gold company, would be in third place, behind Barrick with 5.7 million ounces and NewNevada Gold Mines mont with 5.1 million ounces of Two months later, on May 8, gold, although Nevada Goldcorp the name of the new joint ven- will now produce more than that. ture was announced: Nevada In 2018, Barrick produced

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2.3 million ounces of gold at its Nevada mines, and Newmont produced 1.7 million ounces of gold at its Nevada mines, along with 32 million pounds of copper at its Phoenix mine south of Battle Mountain. Bristow said in May that just over 7,000 people are working for the Nevada Gold Mines joint venture in Nevada. Barrick’s Fourmile project and Newmont’s Fiberline and Mike deposits were not included in the joint venture, since there is still exploration being done at these sites so their valuation is less certain. These sites can be entered into the joint venture at a later date. The change from a hostile takeover to a joint venture allowed Newmont to proceed with its merger with Goldcorp, which would have been prohibited if Barrick had proceeded with its hostile takeover of Newmont. The merger was completed on April 18, making Newmont Goldcorp

The new Nevada Gold Mines joint venture will be owned 61.5 percent by Barrick and 38.5 percent by Newmont, and will be operated by Barrick. Barrick will control three seats on the board and Newmont will control two seats. Bristow explained during the joint venture announcement on March 11 that the ownership percentages were decided upon by having eight analysts develop valuations of the assets which Barrick and Newmont have in Nevada. The conclusions of the eight analysts were averaged. Bristow said that although the two companies have similar reserves, Newmont’s reserves are graded at 1.6 grams per ton, whereas Barrick’s are 3.6 grams per ton. Newmont’s resources are less than 1.6 grams per ton, whereas Barrick’s are over 4, which is three and a half times higher than the industry average. “Both parties had to accept the valuations, which we have,” Bristow said. “And I think that was always the gristle in Nevada. There was the view that one had See Joint venture, 8

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BARRICK GOLD CORP.‌

Joint venture From 6

more value than the other. That’s why over many attempts we didn’t get to a solution, and the only people that really suffered were the shareholders in both companies.” Although Newmont has generally lower grade ore in Nevada than Barrick does, Newmont has some significant infrastructure that Barrick does not have. Bristow commented around the time of the joint venture agreement that if Barrick did not enter into a joint venture with Newmont it would probably invest in more infrastructure, so being able to use Newmont’s infrastructure results in an immediate synergy savings. The Nevada Gold Mines joint venture offices will be in the current Newmont Goldcorp office building in Elko. The Barrick office building which is just down the street from the Newmont building will no longer be used. According to the March 18 Financial Post story, the joint

venture agreement includes a boardroom brawling.” two-year standstill that prevents There was a more positive hostile bids between Barrick reaction to the announcement of the joint venture. At the joint and Newmont. venture announcement breakfast, Initial JV reactions some of the questions asked by During the two weeks that members of the public included Barrick’s hostile takeover of New- how the joint venture would deal mont looked like a possibility, with unions and the mines’ ranch there was a lot of apprehension land. Mayor Keener asked about in the communities in north- charitable giving programs. ern Nevada. Still, with the assertion that the “My conviction remains that Nevada Gold Mines joint venture a dual, competing mine opera- will result in an average savings tor model has worked very well of around $500 million per year, for Elko for more than a decade people are continuing to wonder: and it represents our best option What impact will all of those savfor continued prosperity in ings have on the local communithe future,” Elko Mayor Reece ties in northern Nevada? Keener wrote in an email to the Some people have questioned Elko Daily Free Press. “Elko is a whether the joint venture really major stakeholder caught in the will result in an annual savings crosshairs of these high-stakes of $500 million, but people at merger negotiations. My hope is Barrick maintain that the savthat both entities will take into ings will be realized. The March account the massive, regional 18 Financial Post story quoted economic implications of their Bristow saying, “Despite people actions, and consider the thou- going into a stir about whether I sands of dedicated employees can do these things, I’ve shown and contractors that have devel- them that I can.” oped the world-class mining This issue of the Mining Quarassets that are now the subject of terly is being published on June

6, and the Nevada Gold Mines joint venture goes into effect July 1, so we will all be learning more details about the joint venture in the weeks and months ahead. The employees of the two companies will actually remain Barrick and Newmont Goldcorp employees for another six months after the start of the joint venture to give time to set up all the payroll details. Starting on Jan. 1, 2020, everyone will be Nevada Gold Mines employees.

JV opportunities

In an interview following the joint venture update reception in Elko on May 9, Bristow did suggest that there will be a reduction in the number of corporate employees as the joint venture progresses. However, he also said that if anything, the number of people working at the mines will probably go up, and his emphasis was that the joint venture will have lots of benefits for the local communities, including extending the life of the mines. See Joint venture, 10

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Joint venture From 8

At the start of the May 9 reception Newmont’s Andrew Woodley said, “I know there are questions, there’s anxiety when change happens, but this is big and it is exciting, and we all have an opportunity to make the future what this community deserves and what our people deserve, and that is an exceptionally strong, successful and profitable goldmine business. There are great resources out there in the ground, and there are great resources in our people.” Bristow said that when he came to Nevada during the Barrick-Randgold merger, what struck him was the illogical structure of the mining enterprise going on between Barrick and Newmont. He saw trucks driving past a processing facility to go to

another facility further away. “There were just so many things that you could do better,” Bristow said. “With this combination there are so many things that are going to improve the way we operate. And when you improve the way you operate, you drop the cost. And when you drop the cost, you’re able to mine more gold, because then you can mine lower grade. You can mine rock that has less gold in it because it’s costing you less to mine it and process it.” “We’re mining in Turquoise Ridge, and we truck it three to five miles to Twin Creeks to process it. Twin Creeks was charging the cost plus 45 dollars more. That’s worth about 1.2 grams off the recoveries. So if we take that out, it means that we can drop the grade of the ore that we mine without changing anything, which means that we can increase the reserves, increase the number of times we can mine, and we

extend the life of the mine.” “And there are other benefits that will come out of this,” Bristow said. “With the two companies we will be able to transport further on private roads, and take these big trucks off the public roads, which is also a benefit to everyone. “And then it’s especially about people,” Bristow said. “As Andrew says, changing times always brings anxiety, but there’s opportunity as well. We are very clear that if we get this job done right, certainly the work force shouldn’t be affected at all.” “We now own together some of the only processing facilities that can deal with very complex metallurgy,” Bristow said. “And that means that we can go and search for resources and reserves that haven’t been exploited, and we can add that to our portfolio. And the one thing that I can assure you is that — and I’m a geologist by profession — and we are going

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to go and find gold. This is such an exciting place.” “People said, we’re going to take away the competition in doing this combination,” Bristow said. “I can assure you, we’re going to encourage competition. We’re going to create different opportunities for multiple transport and other service providers, because that’s our job. We want that. We don’t want to take away competition. We want to build our relationships with the communities, we want to bring business back to Nevada. That’s our job, that’s part of our responsibility now. “In discussing the press release about this event, we asked, do we say this is ‘new opportunities’ or do we say this is ‘enormous opportunities’? And my vote was for ‘enormous.’ “The opportunities have always been there,” Bristow said. “Everyone just talked about it. This combination was talked

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about for more than two decades. It’s amazing, everyone talked about it, it was tried multiple times, and it’s like any good thing in life – it eventually gets there. Every time it failed, everyone knew that the logical thing was that it should have happened. So it’s a great privilege to be part of this combination.” “We are talking about schooling and training and coaching and development of people. That’s what we want to do. We want to go and attract people from this state. We shouldn’t have to go somewhere else. We’ve been mining here now for a very long time. We should be developing our own skilled people, and supplying skills back into the greater American mining industry.

One team

“We’re going to be one team. And when we say that, we include everyone. We want you to feel part of us. There’s no question

or criticism that’s not important. We want you to feel free to voice your concerns. I promise you, when you raise issues, we’ll take them seriously, and we’ll work to become corporate citizens that you as Nevada folk will be proud of. “I look forward to working with all of you. I look forward to getting to know you, and I invite you to join us in this enormously exciting voyage that stands ahead of us.”

Commitment to the business & community Bristow has said in the past that he likes to keep corporate offices small. In an interview following the joint venture announcement on March 11, he said, “The original Barrick back in the 80s is what I modeled my company on, and that is very entrepreneurial, agile and modern in its thinking, with a

very small head office.” After the May 9 reception Bristow said that five years ago, Barrick had about 500 people at its corporate offices. By the time Barrick and Randgold were talking about a merger last year, that number was down to about 150. Bristow said there are now about 70 people at the Barrick/ Randgold offices in Toronto. “Over the whole organization we’ve taken out about $135 million of people costs between the operations and the corporation. It was just too fat and lazy,” Bristow said. Bristow said that Randgold, which was a smaller company, only had seven people in its corporate offices. Bristow said that a problem he has seen in Barrick and Newmont is educated professionals who come and go from top leadership positions. He said this kind of revolving door can undermine the whole workforce.

“I’ve said this to the Barrick team — if you don’t want to be long term participants in our business, you’re not welcome. We’re not going to put up with mercenaries. I’d rather have somebody who works damn hard, and is completely loyal … than somebody who is not a long term player.” “We want people who are coming out for the long term, and who are very committed to the community, and participating, working with the schools, supporting their children and the community.” “We’ve got to stop going to work to have a job,” Bristow said during the reception. “We want to go to work because we’re part of a business, a business that creates value. “Business is about people,” Bristow said. “The bottom line is, if we are going to succeed in this venture it’s going to be through people.”

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TOP STORY

What will become of the Legacy Fund? TIM BURMEISTER Mining Quarterly editor‌

‌ELKO — The Legacy Fund, the charitable giving program for Newmont Mining employees, has had a huge impact on local communities since the program started eight and a half years ago. So with Newmont Goldcorp now entering into the Nevada Gold Mines joint venture with Barrick, a lot of people are wondering: What is going to happen with the Legacy Fund? Work on putting together the joint venture will continue through the coming weeks, and the details of Nevada Gold

Mines’ charitable giving program have not been finalized, but recently Newmont Legacy Fund Executive Director Nancy Ostler received this statement from Rebecca Darling, head of community and corporate affairs at Barrick: “Barrick and Newmont Goldcorp have always shared a strong commitment to community partnership and sustainability that will continue with the formation of the joint venture operation. We understand the importance of the Legacy Fund to the workSUBMITTED‌ force and local community Children at the Spring Creek Christian Academy show their appreciation See Legacy, 14

for the Newmont Legacy Fund. The fund gave the school a check for $30,540 last September.

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organizations. The JV plans to establish an employee gift match modeled after the Legacy Fund. We are working closely with Newmont Goldcorp to learn more about how the Fund is administered and will share more details about future employee gift match programs following the close of the JV transaction.” Following a joint venture reception held in Elko on May 9, Barrick Chief Executive Officer Mark Bristow said, “One of the things that I’ve always believed is that our community commitments are part of an investment into the community. They should make a difference. And we’ve got our own commitments, and Newmont has as well, and we’re going to be combining that and making sure that it goes further and reaches to more parts of the community. We’re definitely not planning to cut back on our commitment to the community.” Ostler and Lisa Becker, director of communications and external relations at Newmont Goldcorp, said these statements from Barrick are very exciting. “So their plan is to continue forward with the program very much like the Legacy Fund,” Becker said, “modeled after the Legacy Fund and the way the Legacy Fund works. “We’ve realized that with the Legacy Fund,” Becker continued, “the way we developed it to be a stand-alone 501©(3) nonprofit, that created some complications in how we move forward. How does Newmont move forward with the Legacy Fund, and how does the joint venture? So we’re still working through a lot of those specifics, just to try to iron out some details. But the joint venture, as Rebecca said, will plan to have a similar program.” “And that’s critical for our communities,” Ostler said.

Newmont has three parts to its community investment and engagement program: community investment grants, a volunteer program, and an employee giving program. The Legacy Fund employee giving program has seen a lot of growth since it started. The numbers make it clear that the Legacy Fund has had a huge impact on northern Nevada communities. The Legacy Fund kicked off in the fall of 2010 as a new charitable giving campaign for Newmont employees. Employees could give to any nonprofit of their choice, and Newmont agreed to match every dollar, with no limits on the size of the contributions. In 2011, Newmont employees gave a total of $650,000, so with Newmont’s match, $1.3 million went to nonprofit organizations, mostly in northern Nevada communities. Since then, the Legacy Fund has continued to grow, reaching a record high in 2018, with an unprecedented 75 percent of the Newmont employees participating, giving over $1.5 million dollars, so that the total going to nonprofits with Newmont’s match was $3.1 million. From 2010 through the end of this year, a total of more than $21 million will have been given to organizations across northern Nevada, from Winnemucca to West Wendover. “The cumulative effect of having year after year after year of these substantial and impressive contributions to the communities has helped build more robust programs and more robust nonprofit organizations,” Ostler said. “It’s not just a onetime check. It’s been a lot bigger than that, a lot broader and a lot stronger of a foundation.” Allowing employees to choose any nonprofit lets them give to the organizations they feel most passionate about. “There’s no steering of funds by the company. It’s all up to the

ELKO DAILY FREE PRESS, Elko, Nevada • 15

employee,” said Adrienne Green, a HR manager at Newmont. “Each employee gets to donate where it’s meaningful to them. So if they’ve had family members or they themselves have utilized services in our community and they want to give back to that organization, they can choose to do that. It’s all in their hands.” Currently the Legacy Fund provides funding to about 350 nonprofits in the region. Green was on the board of Newmont’s previous charitable giving campaign, and she and another woman decided to brainstorm ways to improve the program. Green said they wanted to “get employees more excited about it, get them more engaged and get them a little bit more rooted in our communities as far as seeing some results. We came up with a plan and presented it. Today you see the results of what that plan ended up becoming.

“It’s improved over the years and Nancy and the board have done a great job of growing it each year and getting people more excited … I think that’s a key factor in its success over the years is that we as employees can see the results in the community.” Ostler said that nationwide at companies which have charitable giving programs, an average of about 24 percent of the employees participate in the program. “So Newmont employees, with 75 percent participation, are incredibly generous,” Ostler said. To help prepare for the possibility of a future slowdown in the mining industry as resources are used up, the Legacy Fund also has an endowment fund, a nest egg which will bear interest for future charitable giving. Currently there is $2.9 million in the endowment fund. It has been growing at about $350,000 per year, with Newmont putting in $130,000 per year and the

remaining amount coming from employee contributions and Newmont matches. Some more good news that Ostler shared is that all of the money which Newmont employees and Newmont Goldcorp have pledged to give to nonprofits in 2019 – a total of $2.7 million – will continue to go to the nonprofits throughout the remainder of the year. “I’m happy to be able to say that Newmont Goldcorp is going to fulfill the pledges through 2019,” Ostler said. “So even though there are a bunch of changes going on, the community can be assured that the 2019 pledges will be paid out. That’s a huge commitment for Newmont Goldcorp. They’ll stand by that commitment even though effectively the joint venture will have taken over. But they didn’t want to leave the community without that funding after they had already promised and committed

to that funding.” “That’s a huge win for the community and huge win for everybody involved in the program,” Ostler said. Ostler credited the success of the Legacy fund to the generosity of the Newmont Goldcorp employees and their passion for supporting their communities. Ostler also pointed out that there are so many benefits to a program like the Legacy Fund, in addition to the obvious benefits of helping lots of local organizations. She said that statistics have shown that “the more you have employees engaged in something like this, the safer they are, and the healthier they are.” With the Nevada Gold Mines joint venture promising to continue a giving program like the Legacy Fund, the many benefits that local communities and miners have seen through the Legacy Fund should continue far into the future.

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16 • MINING QUARTERLY • SUMMER 2019

INDUSTRY

Industry specialist outlines mineral projects ‌ELKO — These are busy days in Nevada’s mining industry, with exploration of minerals other than gold and silver growing and new projects underway or planned. Joel Lenz, the mining industry Lenz specialist for the Nevada Governor’s Office of Economic Development, provided an update to the Mining Quarterly in May on exploration and mining projects around the state. His report follows:

Nevada at this time. Three of them are under active development, by three different companies. They’re all small companies, but all are working diligently in bringing those projects to life. The one that’s furthest advanced is owned by Prophecy Development Corp. which has the Gibellini deposit outside of Eureka. The company is very active right now. First Vanadium has the Carlin project just south of Carlin, and the company released its first resource estimate late this winter. The company is working on a preliminary economic assessment of that deposit, so that project is advancing and looks Vanadium There are four deposits of very promising as well. vanadium that are known in The third vanadium project

is Iron Point, which is owned by Victory Metal. It’s a new project. The company has been drilling and is continuing to advance that project right now, so that’s pretty exciting. Vanadium is an alloy used to strengthen steel. It was not too exciting a metal in the past because it just followed the steel market. When steel consumption went up, vanadium prices went up, and when steel consumption went down, they went down. Last year, China revised its requirements for vanadium in alloys for reinforcing bar. That made China a net importer of vanadium rather than an exporter, which really drove the price up. That’s pretty important, but

the other really important story for vanadium is that it is used in what is called a vanadium redox flow battery. This is a new type of battery used in renewable energy plants. If you have a big wind farm or a big solar power plant, the sun only shines half the day. For the other half of the day, you want to store that excess power for use when the sun isn’t shining, and vanadium redox flow batteries are used for that purpose. They’re very large batteries that are about the size of one of those shipping containers that go across the ocean. They have long life cycles with their recharge and discharge capability. Because there are no vanadium deposits currently being mined in the United States, these in Nevada

ELKO DAILY FREE PRESS, Elko, Nevada • 17

could be the first ones and could be very important in playing a role in renewable energy. Part of Nevada’s strategy is to continue to develop the renewable energy resources in the state. Up until now, vanadium has been mined primarily in China, Russia and Brazil.

Molybdenum

Molybdenum is another metal primarily used as a steel alloy. It is also used in molybdenum disulfide, a lubricant used to enhance the properties of lubricating greases in rotating machinery. Nevada is a very small producer of molybdenum right now, with just a little byproduct production at the KGHM Robinson copper mine outside of Ely. However, General Moly has the very large deposit, Mt. Hope, outside of Eureka, and the company is going back through its permitting and financing phases after a long lull to bring the project to

production. If that comes into production, it will be a primary moly producer and a very large one in the state of Nevada with a very long mine life. The U.S. Bureau of Land Management released a revised draft environmental impact statement on Mt. Hope in March.

Lithium

Mining Quarterly has written about a few lithium projects, including the Lithium Nevada Thacker Pass Project in Humboldt County. That one is the most advanced and probably the highest-grade clay deposit in the state and in the world, and it is moving forward. The company should submit its plan of operation sometime this year, which would begin the permitting process. Lithium Nevada has stated that they plan to start construction by the end of 2020, and the company wants

to have it producing by 2022. There are two other lithium projects in the state that are moving forward. They’re down in Esmeralda County. The first one is owned by a company called Pioneer Ltd., an Australian company that owns the Rhyolite Ridge project. Rhyolite Ridge is a unique deposit because it is not only a lithium project but also a boron project. The project will produce both lithium carbonate and boric acid. This project is in the feasibility study stage, and the company has said it hopes to complete the study by the end of the ye ar. The company is looking for partners and agreements that will help them finance that project and put it into construction once permitted. The third one is a little further behind. It’s owned by Cypress Development Corp. Cypress is registered in Vancouver in Canada, and the chief executive

officer lives in Twin Falls, Idaho. The company has done a preliminary economic assessment and plans a preliminary feasibility study this year on the project in Clayton Valley in Esmeralda County. Cypress also did more drilling this year and is doing metallurgical testing on that deposit. If all three of these projects were to be put into production, they would increase the lithium production in Nevada from 5,000 tons per year to more than 100,000 tons per year, making Nevada a major player in the lithium market worldwide. Current lithium production comes from Albemarle Corp.’s Silver Peak operations in Esmeralda County, where lithium is produced through a brine solution. Lithium is one of the world’s growth metals due to the electric See Projects, 39

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18 • MINING QUARTERLY • SUMMER 2019

Editor

and the mine employees show a lot of support for their surrounding communities. From 3 Politics: There are taxes and regulations on mines – but how work into figuring all that out. big should the taxes be and what Mechanics and engineering: should the regulations be? There is all kinds of incredibly The environment: Mines engineered equipment used change the environment. What in mining. steps should be taken to mitiMath: There is a lot of math and a lot of numbers involved in gate the environmental impacts and protect communities in mining, including the number of tons of dirt moved every day, the area? Safety: Mines have become the small amount of gold in each much safer over the years, but it ton, and what the value of the is still an inherently dangerous gold adds up to each day. industry, and every mine conHistory: There have been tinually emphasizes safety and significant changes from the safety improvements. Safety days when mining companies involves technology and psysent workers into extremely dangerous conditions, and from chology. There are the annual MSHA refreshers and signs all the days of the gold rush, to over the place. What are the today’s mining. best ways to continually motiCommunity relationships: vate safe behaviors? Mines are small communities The relationship of minwith hundreds of people all ing and the press: Over the working together at one site years, by reporting on mining with one goal. And the mines

accidents and on the actions of mining companies, the press has helped inspire the societal changes that led to mines becoming safer and more worker-friendly. Economics: Mines are businesses, and profitability for the shareholders is the bottom line. But the businesses are also a huge part of the local communities. The impacts on the workers and the local communities are entered into the equation as business decisions are made – but are they always given enough consideration? This has been a topic of discussion as the Barrick – Newmont takeover/ joint venture discussions have progressed. Futurology: What will the future bring? Advancing technology makes it possible to extract value in new ways. And changing technology in other industries can increase the value of particular resources,

leading to new mining opportunities. For example, renewable energy and electric vehicles are increasing the demand for vanadium and lithium. And what about artificial intelligence, robotics, and autonomous equipment? For now, the equipment is helping to keep people safer. For example, a miner may be in a control room operating a drill instead of being in a mine shaft. But what if the equipment goes completely autonomous? This may be a ways down the road, but maybe someday a robot reporter will be interviewing an autonomous haul truck and an autonomous drill for a story. And maybe then all the humans will be at a party. Hey! That doesn’t sound so bad! In the meantime, there is a lot of mining to be done, and there are a lot of mining stories to write.

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“We rallied from 6-0 to 6-3. Paul O’Neill pinch hit for Joe Girardi with runners on base. He struck out as did Tino Martinez to end the rally. We thought that was it. The Braves had closer Mark Wohlers waiting to close out the game. He entered in the 8th inning. With one out and Charlie Hayes and MAriano Duncan on base, it was my turn. First time ever facing Wohlers. First pitch fastball 98mph fouled back. Two sliders for balls. Another fastball 98mph fouled back again. 2-2 count, another slider fouled off. Looking for a fastball, Wohlers went with a slider and hung it. Joe Buck called, “Back at the track at the wall we are tied.” We win game, momentum changed. Win series in 6 games and, “The Dynasty had begun.” -Jim Leyritz, 2x World Series Champion

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20 • MINING QUARTERLY • SUMMER 2019

FEATURE

Phoenix Drill and Blast Analyst Arturo Trevizo talks about the mine’s Bonanza 5 copper pit.

Phoenix: Long-lived mine

STAYS PRODUCTIVE

Mine makes use of big mill, copper leach and latest tech

STORY AND PHOTOS BY TIM BURMEISTER Mining Quarterly editor‌

‌As the new editor of the Mining Quarterly, in early May I took my first mine tour, traveling to Newmont Goldcorp’s Phoenix mine about 12 miles southwest of Battle Mountain. “Usually folks save the best for last, but in this case, you

get to experience the best first,” said Phoenix General Manager Mark Evatz. People at other mines might argue that their mine is the best, but like all the mines around the state that each have several unique features, Phoenix does have several aspects that stand out. It has a big mill which is the largest semi-autogenous grinding (SAG) mill in the United States and the second largest in North America (there is one larger SAG mill in Canada). And along with producing gold and

silver, Phoenix also produces copper cathode sheets that are ready to send straight to market. Copper is an important player in the Phoenix production portfolio. Along with the copper sheets, the mine also produces a copper concentrate. The copper production totals about 40 million pounds a year. Phoenix is the only mine with major copper production in the new Nevada Gold Mines joint venture. The copper production supplements the mine’s gold production of about 180,000 ounces

per year. The mine produces several metal product streams. About half the gold that goes through the mill is captured in a precipitate and that goes to the Twin Creeks mine to be made into dorè bars. The other half of the gold is captured in the copper concentrate that goes to third party smelters at various locations around the world. And there are the copper cathode sheets produced at the solvent extraction/ electrowinning (SX/EW) plant. The tour of Phoenix in early

ELKO DAILY FREE PRESS, Elko, Nevada • 21

May took place a little while before the mine makes a transition from being a Newmont mine to being part of the Nevada Gold Mines joint venture between Newmont and Barrick. Evatz will be leaving Phoenix to continue working for Newmont, and Detlev Van Der Veen, who has been the mine manager at Phoenix, will become the new general manager for Phoenix/Lone Tree.

Phoenix history

Mining in the area of the Phoenix mine dates back to 1864, when copper and silver were discovered in Copper Canyon. Copper Canyon Mining Company acquired property in the area in 1916. On the walls of a conference room in the Phoenix office building there are pictures of a floating dredge that looks like a big houseboat. The dredge was used in the area in the 1940s and ‘50s. Duvall Corporation acquired

Phoenix Mine Operations General Foreman John Neary looks at a drone image of the Box Canyon dumps. Drones are increasingly used for a variety of applications at the mine, including evaluating routes and giving equipment operators information about their work day.

the mining properties and began mining copper at today’s Phoenix mine site in 1964. Duvall’s Battle Mountain open pit mines were Nevada’s third largest copper producer until depressed copper prices in the 1970s led to a gradual conversion to gold production. Duval spun off Battle

Mountain Gold, which operated the gold mill through 1993. Newmont merged with Battle Mountain Gold in 2001, and Newmont’s Phoenix operation was commissioned in 2006. With the long history of mining at Battle Mountain and Phoenix, there are some miners

who have a long history with the mine. “We’ve had two or three guys who started with Duvall and the group that had it before, and they worked around the region and then came back and finished their careers exactly where they started,” said Phoenix Process Maintenance Superintendent Bob Tucker. “We had one guy who had 33 years in the industry. He started his career on this mountain and finished it on this mountain.” “We’ve got guys working here right now whose fathers worked here, who began careers here years and years ago,” said Phoenix Process Operations Superintendent Galen Hope. There have been many years of mining at the Phoenix site, but there is still a lot of life left in the mine. In September 2018 the Bureau of Land Management See Phoenix, 22

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Phoenix From 21

approved a proposed expansion of the Phoenix mine which provides for the potential to extend the life of the mine from 2040 to 2063. The proposed expansion, with enhanced operational efficiencies, would increase the surface disturbance at the mine by 3,497 acres, from 8,374 to 11,871 acres.

A mid-size mine

Phoenix today has about 450 employees, and there are about another 30 at the Lone Tree mine to the north. “Everything you see today fundamentally comes down to the fact that we have a great team,” Evatz said. “Everyone knows their roles and responsibilities on the team, they show up extremely dedicated, and that’s what drives success here

The Phoenix Mine phase 2 copper leach pad, in the foreground, is used to extract copper from ore which was considered waste just a few years ago.

at Phoenix.” “The beauty of our site here is the teamwork,” Phoenix Process Manager Megan Tibbals agreed. “It’s a pretty close-knit group here working efficiently as a team. No job is too big or

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small for any of us to pitch in and help out.” Evatz said there are three core values at Phoenix. Safety is the foundation, and after that, the two top priorities are environmental compliance and being

good stewards in the community. About half the workforce lives in Battle Mountain, Evatz said, and the other half lives in Winnemucca, which is about another 50 miles down the interstate.

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Copper mining

Newmont started operations at Phoenix in 2006, and the following year plans began for a new copper processing project at the mine. The construction of a copper SX/EW facility was approved in April 2012. Construction was completed in Oct. 2013, and the first copper cathode sheet was produced on Oct. 14, 2013. Commercial production began on Oct. 31, 2013. The process is designed to produce around two million pounds of copper each month. Now, ore that would have been dumped out as waste is used to create a steady supply of copper cathode sheets that are shipped to market. “The ore that we’re processing out here, before we built the SX/EW facility and the copper leach pad, this would have all been considered waste,” Hope said. “Because its grade is so low, or the composition isn’t correct

Left: New copper sheets are pulled out of the electrowinning cells in the tank house at the Phoenix Mine. Right: A copper sheet in the shape of Nevada is displayed in the copper tank house at the Phoenix Mine.

for the mill, it would have just been wasted. But now we have the ability to make a revenue stream out of what was once considered a waste stream.” Waste ore that had been stockpiled years ago has also been hauled to the leach pads to make copper. The leach pads for the copper are currently about eight miles

from the pit that the ore comes from, so it’s about a 45 minute round trip for the haul trucks. Up to around 50,000 tons a day is hauled to the copper leach pads. A phase 2 copper leach pad next to the original pad was commissioned in Oct. 2018. They are not quite through the second lift on the phase 2 leach pad.

The leach pad is irrigated with a dilute sulfuric acid solution. The leached copper goes to a nearby pond, and the pregnant leach solution and is then piped to the solvent extraction plant. There, the pregnant leach solution is first mixed with “organic,” and an extractant See Phoenix, 24

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24 • MINING QUARTERLY • SUMMER 2019

Phoenix From 23

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absorbs the copper and settles in the extraction settlers. The copper-loaded organic then proceeds to the adjacent stripping settler, where the copper is stripped from the “organic,” creating a rich electrolyte. Looking down into that tank you see a blue solution and turquoise-colored residue on the equipment and around the edges. The electrolyte is piped to the nearby tank house where more magic happens. The electrolyte is fed into electrowinning cells which each have 61 anodes and 60 cathode stainless steel blanks. Electricity causes the copper to plate onto the blanks, and when the new copper sheets are about a quarter of an inch thick, a large overhead crane pulls the cathodes out of the solution. The copper sheets are then stripped off as they go though some automated stripping equipment, and they are bundled for shipment. The copper is also given a grade before it goes out. The copper sheets produced at Phoenix are grade A, although a few sheets get assigned a lower grade. Each copper sheet weighs about 95 to 105 pounds. Around 40,000 pounds of copper is shipped out in each truckload. “It’s a fun little operation

over here,” said Joel Sherbondy, a process control specialist who works in a control room that looks out over the electrowinning process. “It’s a little different from my days back in the mill. It’s clean. It comes in a nice, pretty blue and it turns into copper. It’s forgiving — if you have an upset it cleans up real quick. In my mill days you could spend a lot of time cleaning up … this is a lot different. It’s pretty sweet.” “The best part of the job is you see the end result,” Sherbondy said. “When I made gold, I didn’t see any gold. Here, you see your end result every day. It’s kind of rewarding.”

The big mill

The big SAG mill at Phoenix is larger than any other in the United States, and it is an impressive sight. The mill processes 30,000 to 40,000 tons each day, depending on the rock type. “This is a low-grade deposit, so volume is what makes up the difference,” Evatz said. “High tonnage and quality recovery of the low grade ore is what allows us to keep profitable.” The SAG mill is 18,500 horsepower. “The motor on our SAG mill is the fascinating part for me,” Hope said. “The mill is its own motor,” Tucker explained. “The mill is See Phoenix, 26

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26 • MINING QUARTERLY • SUMMER 2019

Phoenix

The hard rock is mixed with softer rock to create blends that the mill can process.

what would be considered the rotor in a motor. It’s a gearless drive. So you don’t have a motor and a gear. “Traditionally what you’ll see is a geared drive, a big ring gear and pinions. A mill of this size would take two motors and pinions, one on each side,” Tucker said. He said there have been debates about the mill over the years, but that overall the mill has worked out well, and it offers some flexibility you don’t get with more traditional mills. It can run in either direction, and most importantly, it is easy to change the speed. “I think for this facility it was a good choice because you can run slow or fast,” Tucker said. “You want to slow it down based on hardness of ore. If the ore is fairly soft, you want to be able to

The shop

From 24

The mine tour made a stop in the shop, which has four haul truck bays, and Nash Johnson explained the new locking station system that had been instituted just a couple weeks earlier. It’s a safety measure designed to keep unauthorized people out of the work areas. “It is a change for the guys, it’s a big change,” Johnson said. “They seem to be taking it pretty Nash Johnson talks about how the new locking station procedure which well. I have to remind them, we was recently instituted helps to improve safety in the haul truck shop at don’t just change for the sake of the Phoenix Mine. change. There’s always someslow the mill down, but if the ore Some of the rock in the For- thing behind it.” is fairly hard, you have to run it titude section of the mine is at a higher speed.” extremely hard. Technology: “And we’re mining out of “In other mines you can drill Drones two different ore bodies that are a hole in 10 minutes,” Phoenix completely different from each Drill and Blast Analyst Arturo “We’re really on the cutting other,” Hope said. “So having Trevizo said during the mine edge of using technology to that flexibility for speed is really tour. “It can take us an hour to leverage up and expand our opercritical for these ore bodies.” drill one hole.” ations in terms of profitability,”

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Evatz said, “and also to make the work more safe and efficient from the workers’ standpoint.” Evatz said that labor is about 45 percent of the costs at the mine, and technology helps the miners “be more efficient and effective in how they go about doing their jobs.” “So we’re really excited about the technology that we’re utilizing, and also the technology that we think is coming up that will be put to work for us.” Two of the recent advances in technology that the mine is making use of are autonomous drilling and drones. This mine tour included a drone demonstration. The Phoenix mine has been using drones for a few years. Recently they have made increasing use of drones for various applications. Drones are used for surveying and engineering the mine site. They check out the high walls and slopes. They are also used to

Senior Engineer Tech Nick Ingwers flies a drone at the Phoenix Mine. The mine is making increasing use of drones for a variety of applications.

keep everyone updated on dayto-day operations. “With drill perspectives, shovel headings, loaders, or on the dumps, we can see those areas changing and we can enhance our operations,” Phoenix Mine Operations Foreman Trent Ingle said. “We can give an image to our

shovel operator, and they have a good visual aid, especially after coming back from their days off,” Ingle said. “They see right away what they can anticipate.” “That’s a big help that we’ve seen with the drone application.” The drone images also give guidance to the haul truck operators.

“We assess and evaluate our haul roads and intersections, and see where there are areas for improvement,” Ingle explained. “It’s quite a bit of a visual aid,” Ingle said. “And we also utilize it for month-end surveys. That’s a big one, that’s helped us out. From a safety perspective, instead of walking the perimeters of stockpiles, we can eliminate having individuals on the ground. We use the drones to get the images and the accurate volumes.” Nick Ingwers, a Phoenix senior engineer tech who operates drones, said that when they are out on the mine site with drones they have a Wi-Fi connection so they can use a laptop or tablet to send images to the engineers right away. “It’s really helped us out quite a bit,” Ingwers said. “It gives us some pretty immediate feedback on the stuff out there, and it gives them, if it’s good, the immediate results they’re looking for.”

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28 • MINING QUARTERLY • SUMMER 2019

FEATURE

The Phase W expansion at the Kinross Round Mountain mine extends the existing pit into a deeper portion of the ore body.

Round Mountain

expansion on schedule Mine life extended to 2027 STORY AND PHOTOS BY TIM BURMEISTER Mining Quarterly editor

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ROUND MOUNTAIN — The Big Smoky Valley between the scenic Toiyabe and Toquima mountain ranges in central Nevada does not have many people living in it, but Round Mountain mine near the southern end of the valley has had some extra activity going on for the past year and a half as crews have worked on a mine expansion project. Kinross’ Round Mountain mine has approximately 845 employees, and during construction of their most recent expansion, the mine also employed up to 250 contractors at any given time. The $445 million Phase W expansion project was announced in September 2017 and construction work started in the first quarter of 2018. There

has been an aggressive schedule to reach the goal of finishing up the work in the second quarter of 2019. In May there was a hive of activity around the big new building being built to house the new truck shop and warehouse, with crews working on lots of aspects of the building construction all at once. The new haul truck shop is 40,000 square feet and has 10 bays. “All the construction is progressing quite well,” Kinross Round Mountain General Manager Neil Jensen said in early May. “We’re on track with the costs and schedule. It’s been a really good project. We’ve begun to commission some of the processing facilities here in the second quarter as planned.” The new processing facilities include a new dedicated heap leach pad and a new vertical carbon-in-column plant which will process solution from the heap leach. They have been stacking ore on the new leach

ELKO DAILY FREE PRESS, Elko, Nevada • 29

pad and have been circulating solution. In the mining area, they have been removing waste from the thick alluvium layer to get down to the ore. Jensen said it looks like they will begin to produce some gold from the new section of the mine in the second quarter. Round Mountain is a large open pit mine, and the Phase W expansion extends the pit into a deeper portion of the ore body. The current pit is 1,602 acres and approximately 1,200 feet deep. The Round Mountain plan boundary, including Phase W, encompasses 10,864 acres. Phase W only increased the footprint by 53 acres, since it is primarily within the historical footprint. Prior to the project, Round Mountain’s mine life only went through 2019, but the Phase W expansion extends the mine life to 2027. Once the new buildings are

US,” according to the GoldRushNuggets.com website. Geologists have found that the gold in the Round Mountain area is in the rim of an ancient collapsed caldera. In some places there are visible veins of gold in all kinds of impressive formations. These aren’t found very often anymore. According to histories of Round Mountain, gold may have first been discovered there in 1905, and the following year things really got rolling with Kinross Round Mountain General Manager Neil Jensen talks about the the discovery of high-grade geology of the mine’s open pit. gold ore. Soon Round Mountain was a town of hundreds of completed, the truck shop, reestablished in a normal rou- people, with saloons and merwarehouse and purchasing tine and not be in a construc- cantile stores and daily stage coach runs. employees will move and the tion mode.” old buildings will be torn down For about the next 60 years, to provide additional area for the Round Mountain miners traveled through underPhase W mining. ground tunnels to follow the history “It’s going to be pretty nice to rich gold veins. In 1977, the area get back to normal operations,” “The Round Mountain Gold was converted to a commercial Jensen said, “and be in those Mine is one of the more celenew facilities and get everybody brated gold discoveries in the See Round Mountain, 30 ENVIRONMENTAL • WATER RESOURCES • ENGINEERING

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Round Mountain From 29

open pit mine. Through the years there have been a variety of joint ventures operating the Round Mountain mine. As Jensen remembers it, when he started there it was a three-way venture with Echo Bay Mines, Homestake Mining and Case, Pomeroy and Co. Homestake then bought out Case Pomeroy, making Homestake a 50 percent partner in the mine. Barrick later acquired Homestake, and the 50 percent partnership in Round Mountain. In 2002 Kinross Gold merged with Echo Bay Mines and TVX Gold. Kinross acquired a 50 percent ownership interest in Round Mountain in 2003. Newmont Gold was also involved in this complex

“Kinross has been very happy with the performance of Round Mountain over the years. I think that can be confirmed by their purchase of the joint venture buyout. That was a really good indicator that they wanted to continue to invest in Nevada.” “Kinross has had a pretty strong history in Nevada,” Jensen said. “It’s been a really good company to work for.” In recent years Kinross has been the third-place company In 2018, the Round Mountain mine celebrated pouring its 15 millionth for gold production in Nevada. ounce of gold since 1985. The three giant gold bars sitting outside the Now with Barrick and Newmont Round Mountain offices depict what 15 million ounces of gold would look entering into the Nevada Gold like if it was all poured into three five-million-ounce bars. Mines joint venture, Kinross will ownership scenario in several the Bald Mountain mine south be in second place. ways, including a partial own- of the Ruby Mountains. In ership of Echo Bay. October 2018, Kinross acquired Production In January 2016, Kinross the remaining 50 percent of the Round Mountain produces acquired Barrick’s 50 percent Bald Mountain joint venture fairly low-grade ore, and the majority of it goes to the dedishare of Round Mountain, mak- from Barrick. ing Kinross sole owner of the “I think Kinross has been cated heap leach facilities. There mine. At the same time, Kinross very dedicated to growing the are four now, including the new acquired partial ownership of Nevada assets,” Jensen said. one. The new heap leach pad is

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A new haul truck shop is being constructed at the Round Mountain mine as part of the mine’s Phase W expansion project. The shop is 40,000 square feet and has ten bays.

9 million square feet, and will hold 65 million tons of ore when it is piled up to 250 feet. About 25 to 30 percent of the production, generally the higher-grade ores, is processed through milling, which is primarily a gravity concentration circuit. Round Mountain also has had a reusable leach pad circuit, which Jensen said is not a common piece of mine infrastructure. There have been some good aspects to this process, but with the extra cost of crushers and the rehandling of materials, the reusable pad circuit is being decommissioned. There has been a lot of gold produced Round Mountain over the years. One history said that in the first 10 years of mining at the site, from 1906 to 1916, the value of the ore produced was a little over $3 million. The current, more official accounting of the gold produced at the mine dates back to around the time Echo Bay began operating the mine in 1985. By 2006 the mine had produced a total of 10 million ounces of gold. In 2018 Round Mountain celebrated pouring the mine’s 15 millionth ounce of gold. Models of three giant gold bars sitting outside the Round Mountain offices depict what 15 million ounces of gold would look like if was all poured into three five-million-ounce bars. The three bars would be very

heavy and expensive if they were made out of real gold. They would weigh about 470 tons, and at today’s prices would cost about $19.3 billion. The Phase W expansion is expected to increase the gold production at Round Mountain by 1.5 million ounces through the remaining life of the mine. The mine is projected to produce an average of 341,000 ounces of gold per year from 2018 through 2024. The stockpile milling and leaching from 2025 through 2027 is projected to produce an average of 46,000 ounces per year. The silver production at Round Mountain is about 30 to 40 percent of the gold production.

Wall monitoring

Last fall, Round Mountain experienced a slide in the southwest portion of the pit wall. No employees were injured, and the event did not significantly impact production or the Phase W expansion project. Through the use of a radar monitoring system as well as a combination of geological and aerial data, the mine was closely monitoring and well aware of potential pit wall issues prior to the event. As part of their mining operations, Round Mountain is working to move ore from the impacted area and continues to See Round Mountain, 32

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Round Mountain From 31

mine in other parts of the pit, including the Phase W expansion area. The mine has a robotic laser system which builds complete measurements of the entire walls throughout the pit. Multiple radar systems, capable of detecting the slightest movement, continuously scan wall sections.

Veins of gold

The Round Mountain mine is world famous among gold nugget aficionados. “Some of the gold crystals that have been found at the Round Mountain Mine are incredible,” says the raregoldnuggets.com website. “Some of the best specimens in the world come from this mine. They are extremely valuable and highly

The Round Mountain offices have displays of some of the interesting geological finds from the mine.

sought after by collectors.” Do an internet search and you can find lot of pictures of impressive pieces of gold from Round Mountain in all kinds of configurations. The Round Mountain offices have some display cabinets

we drill rock.

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which include a variety of examples of gold from the mine. “We bring a lot of educational groups through here, from fifth grade classes through PhD geology students, and they all seem to get a kick out of it,” said Emily Hendrickson, a corporate

social responsibility specialist at Round Mountain. “Listening to a geology presentation is pretty neat,” she said, “and learning about all the volcanic activity that went on for millions of years out here, and how that changed the land, and lets us do what we do today.” Jensen said there is an intermittent vein structure throughout the mine. “There are quite a few different kinds of specimens within those veins, real leafy gold, some of it’s real crystalline looking, and some of it is wire gold,” he said. Jensen said Round Mountain specimen gold is included in geological exhibits at some universities. In the past, Jensen said, the mine had a small gravity circuit which was used to recover coarse gold from the veins so that the specimen gold was preserved instead of just getting poured

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into a bar. The small gravity circuit is now decommissioned. Jensen said they have not encountered any specimen gold at the mine lately. “We anticipate getting back into the veins within the Phase W layback and possibly encountering specimen gold again,” Jensen said.

Cost efficiencies

Looking at the big pit at Round Mountain and the new Phase W extension of the pit, you can see the ore layer slope down toward the valley to the west. That means that there is more waste material to dig through to get the to ore in the Phase W area. “That means the costs increase because of the need to strip more waste above the ore zone,” Jensen said. “So that’s the challenge. How do we continue to be economical and improve our efficiencies and reduce our costs to be able to do that next

Gold sparkles from one of the rocks on display in the Round Mountain mine offices.

incremental piece of mining and add more ounces into the production plan?” One step they took was a big push in 2015 to make sure they were achieving the proper payload in the haul trucks. “That definitely improved our cost profile,” Jensen said. “Before, we had been underloading.” The mine has had a fleet of

Caterpillar 793C haul trucks which were commissioned in 2001. A lot of these trucks are still being used, but over the past couple of years, with the start of Phase W, the mine has commissioned 19 Caterpillar 793F trucks. These new trucks can climb a 10 percent grade in second gear. That reduces the haul time – although it can still take an hour or more to get

from the bottom of the pit to the dump spot. “That fleet has been very productive and has run quite well,” Jensen said of the Caterpillar 793F haul trucks. As part of Phase W, the mine has also commissioned two Caterpillar 7495 rope shovels. One of the shovels was new and one was slightly used. They are 100ton shovels, a lot bigger than the other shovels used at the mine. “Those two are our primary loading fleet in the Phase W footprint,” Jensen said. Most of the mine’s loading equipment needed six or seven passes to fill a haul truck. The largest shovel could fill a haul truck in five or six passes. The Caterpillar 7495 needs just three passes, since two and a half loads from the shovel fill the truck. Jensen said Round Mountain has a very robust Continuous

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Round Mountain From 33

Improvement program. There are just a few people who are full time in the Continuous Improvement department, but the entire workforce is involved in the program. “It’s a program we integrate into our business,” Jensen said. “There’s a working team that is constantly looking at how to improve the business and the site. I think a huge key to being able to keep Round Mountain going and being able to look at these expansions is that mentality of, ‘We always must improve to keep advancing the business.’ We can’t operate the site like we used to, even two years ago.”

Round Mountain culture When I drove to Round Mountain for a mine tour, it seemed very, very remote, because I made the mistake of using a map on the internet to choose which road to take from Interstate 80 to Highway 50. I ended up on a small, rough gravel road, and for mile after mile I shared the road with cows but with no other vehicles. From now on I will use a real map. If you take the correct roads to get to Round Mountain it is not so difficult to get there, but it is still in a remote location. About 2,500 people live in the Big Smoky Valley area, which is about 1,300 square miles. Some of the mines in Nevada are in a rural location that is somewhat close to a city, and a lot of the employees live in the city and commute over an hour to get to work. Jensen said that some of the people who work at Round Mountain live in Tonopah, which is a 45 minute to one-hour drive away. Some have a home further

One of the geological finds from the Round Mountain mine.

away that they commute back to on days off. However, a lot of people who work at Round Mountain live in the small communities close to the mine. “The quality of life, your work-life balance is a lot different than at a lot of the mines in northern Nevada, if that’s the decision you make, which is what I’ve done,” Jensen said. “I can be home in seven minutes. If I want to run down and watch my boy in a baseball game, I can do that.” Because of the mine’s remote location, Kinross operates a day care, a grocery store, a small restaurant and a golf course in the Smoky Valley. Those businesses provide more opportunities for services and recreation for the employees and the Smoky Valley residents. Kinross employs about 40 people who work at these ancillary businesses. Jensen said the rural location sometimes makes it difficult to find new employees who are willing to make the move. He said they are currently a little short of their goal for the number of employees at the mine. Jensen said that although Kinross has a sizeable production from its Round Mountain and Bald Mountain sites, and Round Mountain is a medium to large site, “we have more of a smallmine culture and people focus.” “Some people really like that,” Jensen said. “We’re a little unique … We engage the workforce and collaborate with them and try to incorporate a lot of their ideas into what we do.”

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EXPLORATION

Exploration project updates Nevada projects making progress

‌Victory Metals VANCOUVER, B.C. – Another joint mining venture is in the making as two Canadian companies have agreed to explore for gold, silver and vanadium at the intersection of the Battle Mountain and Getchell Gold Trends in Nevada. Victory Metals announced May 17 that it has entered into an option agreement with Ethos Gold for precious metal rights at the Iron Point Vanadium Project. “High priority, deep gold/ silver drill targets have been proposed by Dr. Quinton Henningh, who will oversee the drilling

program at Iron Point as technical advisor to Ethos,” Victory Metals stated in a release. Victory plans to target vanadium as a priority. The rare element is used in steel alloys for products such as high-speed jet engines. “Iron Point has been the focus of over $20M of historical gold exploration by key operators including Newmont, Chevron Resources, Santa Fe, Kennecott, and Newcrest,” said Victory Metals Executive Chairman Paul Matysek. “Anomalous gold has been found in many places near surface, as well as significant intercepts indicative of Carlin style gold mineralization.”

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Nevada Exploration RENO—Nevada Exploration Inc. (NGE) on May 9 announced the results from its recently-completed 13,000-foot core drilling program at its South Grass Valley Project where the company has discovered a large mineralized Carlin-type hydrothermal system. The company has achieved the objective of its Phase 1 drilling program. By integrating the geologic logging and assay results from the eight, wide-spaced, Phase 1 core holes with the company’s other geophysical and geochemical datasets, NGE said it had confirmed the presence of the critical components required to host a Carlin-type gold deposit (CTGD); confirmed that the scale of the geologic system is consistent with that required to host a significant deposit; built a geologic model to guide continued exploration at this otherwise blind, covered target; and designed a program for the next stage of exploration at what NGE said is one of the most important projects in Nevada in terms of its potential to host a major new CTGD. NGE Chief Executive Officer Wade Hodges said, “If there is a large CTGD at South Grass Valley, we would expect massive volumes of characteristic lower-plate limestone bedrock, within a structurally complex setting, showing evidence of intense hydrothermal alteration,

and containing enriched concentrations of gold and associated pathfinders. Establishing that these critical components are present together at South Grass Valley, and importantly that each exists at a scale consistent with those same features responsible for Nevada’s major CTGDs, was the specific objective of the program; and this is exactly what we’ve found. “We have literally uncovered a brand-new, potential Carlintype district, and as the first exploration company to enter this search space, we believe we have the best opportunity of making a significant discovery here.” NGE’s objectives for its 2019 field program at South Grass Valley are to complete a number of additional core holes to add stratigraphic and geologic information beyond the limits of the Phase 1 drill holes, and acquire additional Scorpion drilling and soil geochemistry samples across the project to select and prioritize targets for later, detailed in-fill core drilling.

Golden Minerals GOLDEN, Colo. — Golden Minerals Company announced May 14 that it has entered into an earn-in agreement with Golden Gryphon Explorations for the Sand Canyon project in northwestern Nevada, where surface work has identified a large unexplored system of epithermal veins. The project consists of 527 claims totaling approximately 16 square miles. It is located 50 miles northwest of Winnemucca and 18 miles See Updates, 39

ELKO DAILY FREE PRESS, Elko, Nevada • 39

Updates

its El Quevar silver property in Argentina and on acquiring and advancing mining properties in From 38 Mexico with emphasis on areas northwest of the historic near its Velardeña processSleeper Gold Mine that was ing plants. operated by Amax Gold Inc. and produced approximately Newcrest 1.7 million ounces of gold Resources and 2 million ounces of silver between 1986 and 1996. Initial ELKO—Newcrest Resources sampling and mapping con- Inc. is planning a second phase ducted by Golden Gryphon and of exploration drilling near the confirmed by Golden Minerals historic mining town of Jarbidge have identified multiple sets of in northern Elko County, pendepithermal veins on the prop- ing completion of the U.S. Forest erty exposed at a high level Service’s environmental analysis and generally trending north to of the project. slightly northeast. Elko County Commissioners Warren Rehn, president voted at their May 15 meeting to and chief executive officer of send comments due by the end Golden Minerals, said, “Sand of that day on the proposed projCanyon is an exciting prospect ect, including statements about that hasn’t been drilled despite the county’s concerns. being located in an area of sevCommissioner Jon Karr raised eral major modern gold mines. the concern that “there’s beauWe are optimistic about the tiful country. I quite honestly strength of the epithermal sys- don’t want an open pit on it.” tem that is expressed at surface He said he wanted to know what by clear geochemical anoma- would be planned on the site. lies associated with high-level E l k o C o u n t y N a t u ra l quartz veining and breccias. Resources Director Curtis Moore This is an excellent explora- said Jarbidge’s water system is tion-stage project with multiple dependent on surface water, and targets that appear to be similar some of Newcrest’s proposed in surface expression to the dis- sites are near the town’s sources. covery outcrops related to the “Elko County would recSleeper Mine. We anticipate ommend exploring risk and moving rapidly through the tar- mitigation measures to protect geting stage and expect to begin that municipal water source,” drill testing late this year. I am he wrote. quite pleased to be exploring in He also recommended the Nevada again, particularly at this Forest Service explore the impacts of the proposed explohighly prospective property.” Golden holds an option to earn ration project on elk and other 60% interest in the Sand Canyon game in the area and look at the project by spending $2.5 million economic impacts to the town of in exploration expenses over four Jarbidge and to Elko County. years. To continue to earn interNewcrest Resources, a wholly est in the project, Golden must owned subsidiary of Austradrill at least 5,000 feet of core or lian-based Newcrest Mining 10,000 feet of reverse circulation Ltd., completed the first phase of or a combination of the two by core drilling at Jarbidge in 2018, and now proposes a one-year the end of the second year. Golden Minerals is a Delaware exploration drilling program, corporation based in Golden, the U.S. Forest Service reported. Colorado. The company is pri- The plan would be to construct marily focused on advancing 15 drill sites.

Projects From 17

vehicle market that is exploding right now. The demand is supposed to rise five-fold in the next six or seven years. So, high demand for lithium is supporting the prices and supporting the development of these projects as well as others in South America and Australia.

Copper

Copper is another interesting metal nowadays. Mining Quarterly has written about Nevada Copper and its Pumpkin Hollow project under construction near the Yerington in Lyon County. The company has just released another assessment, a feasibility study on the open pit project. The company plans to develop the open pit mine next door to the underground mine. That would make Pumpkin

Hollow a very large copper producer in the state, probably the largest. Copper is currently mined at the Robinson Mine and at Newmont Goldcorp’s Phoenix Mine near Battle Mountain. On the other side of Lyon County there is a project called the Ann Mason deposit. Hudbay Minerals acquired that from Mason Resources last fall. The company has stated that its plan is to continue to develop that project and move it forward over the next four or five years. Hudbay is building a very large copper mine in Arizona right now, and it is focused on that, but as soon as that one is up and running, the company can roll into this Mason deposit. So, near the town of Yerington we could see some significant growth in the copper industry for Nevada, which would really be substantial and exciting.

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FEATURE

Women’s Mining Coalition goes to D.C. ‌T he week of April 29, the Women’s Mining Coalition (WMC) hosted the 27th annual Fly-In to Washington, D.C. to give women involved in the mining industry an opportunity to discuss mining issues and policies with legislators, agencies, and other professionals. Participating women work in hardrock, coal, and industrial minerals industries and for companies that provide goods and services to mining companies.

“It is so important that we participate in the legislative process,” said WMC President Sara Thorne, who is a senior permitting manager at Coeur Mining. “This year we found legislators and their staffs genuinely interested in the topics that WMC was putting forward.” Over the course of the three and a half day event, Fly-In participants had 251 faceto-face meetings with congressional offices—183 House

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meetings and 68 Senate meetings. Participants also met with the U.S. Geological Survey, U.S. Forest Service, and the Department of Interior – Bureau of Land Management. Topics discussed included U.S. reliance on critical minerals and the country’s over-reliance on mineral imports; the importance of keeping public lands open to mineral exploration and development; the importance of coal as a balanced, reliable, affordable

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source of energy; and the need for continued development of mining in support of renewable energy technology. Since its inception in 1993, WMC has made annual trips to Washington, D.C. to advocate for a robust U.S. mining industry. Companies represented at this year’s Fly-In included Coeur Mining, Conner & Associates Nevada, Hecla Mining, Kinross Round Mountain and Newmont Goldcorp.

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42 • MINING QUARTERLY • SUMMER 2019

GOVERNMENT

12.5% mine royalty proposed ELKO DAILY ‌T wo western lawmakers introduced bills on May 9 to reform a hardrock mining law that has been in place since 1872. The new legislation would replace mining claims with a federal leasing system similar to other commodities, restrict mining in certain areas, create a fund to reclaim and restore abandoned mine sites, and also would require hardrock mining companies to pay a federal royalty for the first time ever. The proposed royalty is big: 12.5 percent. The Hardrock Leasing and Reclamation Act of 2019 was sponsored by Rep. Raul Grijalva, D-Ariz., who chairs the House Natural Resources Committee, and Sen. Tom Udall, D-N.M. The House version of the bill is co-sponsored by Rep. Alan Lowenthal, D-Calif. The 12.5 percent royalty is the same amount paid by oil and gas companies. The legislation would also place an 8 percent royalty on existing operations, except for miners with less than $50,000 in mining income. There have been several efforts in the past to update the 1872 General Mining Act, with various amounts proposed as a royalty. On May 10 of last year, Grijalva and Rep. Alan Lowenthal (D-Calif.) introduced the Hardrock Leasing and Reclamation Act of 2018. That bill was similar to the one introduced this year. The 2018 version included the 12.5 percent royalty. The 2018 bill did not make it out of committee. In 2015 Udall and three other congressmen sponsored an act that would have set a 2 to 5 percent royalty on new mining operations. Other amounts

have ranged from 4 to 8 percent. This year’s hardrock mining bill might progress further than last year’s bill, since Democrats are now in control of the House. However, Republicans still control the Senate, and the mining agenda there might be to encourage rather than restrict extraction. In the past, Senate Democratic Leader Harry Reid (D-Nev.), a miner’s son, defended mining from reform attempts within his own party. Reid retired in 2016. Both of Nevada’s current senators are also Democrats. The 2019 hardrock mining bill drew praise from some legislators and environmental groups, and condemnation from people in the mining industry. An announcement on Grijalva’s website calls the current law an “antiquated system” that robs the American people of royalties from mining: “Since 1872, mining companies have taken more than $300 billion worth of gold, silver, copper, and other valuable minerals from our federal public lands without paying a cent in federal royalties to the American people. The same companies have left the public with billions of dollars in cleanup costs at abandoned hardrock mines, which have polluted 40 percent of the headwaters of western watersheds.” Barrick Chief Executive Officer Mark Bristow said on May 9 that if a 12.5 percent royalty goes into effect, it will have a devastating impact on the Nevada Gold Mines joint venture. “That will screw up this deal,” Bristow told the Mining

“Critical and strategic minerals are essential to the technologies, products, and infrastructure that make our daily lives work.” U.S. Rep. Mark Amodei, R-Nev.

Quarterly. “That will take away everything that we want to unlock. “Our job as businessmen should be making profits,” Bristow added. “The more profits you make, the more tax you pay. Legislators should understand that. That was how this country was built—hard working people delivering and paying their taxes.” A 12.5 percent royalty on gold would be the highest in the world, he said. In a press release, American Exploration & Mining Association Executive Director Mark Compton said, “The sweeping changes in Rep. Grijalva’s legislation are unnecessary and a disaster in the making for the domestic mining industry and for America. The fact is, hardrock mining is fundamentally different than oil, gas, and coal because it is much more difficult to find and develop hardrock mineral resources. This bill ignores these differences and seeks to force-fit royalty and leasing programs for coal, oil, and gas on hardrock mining. “Without question, the Grijalva bill, if enacted, would substantially chill private-sector investment in exploring for and developing minerals on federal land and dramatically increase our already extensive reliance on foreign sources of

minerals,” Compton said. “This bill poses a significant threat to our nation’s economic security and to our defense, technology, manufacturing, infrastructure, and renewable energy sectors, all of which rely on minerals from mining. The country will suffer as high paying family-wage jobs are exported, and our rural communities will experience disproportionately severe economic hardships.” U.S. Rep. Mark Amodei, R-Nev., has opposed royalty legislation, citing the high costs paid by the industry to develop mines, the significant tax revenue they already provide, and the industry’s high-paying jobs. In the first week of May, Amodei reintroduced the National Strategic and Critical Minerals Production Act (H.R. 2531) which would streamline the mining permitting process. “Critical and strategic minerals are essential to the technologies, products, and infrastructure that make our daily lives work,” he said. “Unfortunately, when it comes to mining critical and strategic minerals in America, duplicative regulations and bureaucratic inefficiencies have forced us to rely on foreign adversaries and competitors for critical minerals, a dependency that threatens the security of our nation and economy.” Amodei said permitting delays stand in the way of high-paying jobs and revenue for rural communities. “In fact, since the 1990s, mineral exploration has stagnated and even declined in some cases because regulatory changes have caused the permit approvals process to take as long as 10 years,” he said.

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44 • MINING QUARTERLY • SUMMER 2019

PEOPLE

Zinke joins Elko-based gold exploration company ELLEN KNICKMEYER AND MATTHEW BROWN Associated Press

‌B ILLINGS, Mont. (AP) — Former U.S. Interior Secretary Ryan Zinke is quickly parlaying his time in President Donald Trump’s cabinet into a lucrative private career. He’s landed a more than $100,000-a-year post at a Nevada mining company and is pursuing involvement in natuRICK BOWMER‌ ral gas exports that have surged U.S. Interior Secretary Ryan Zinke speaks during a conservation announceunder Trump, Zinke told The ment at the Western Conservation and Hunting Expo Feb. 9, 2018, in Salt Lake City. Associated Press on April 16.

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The rapid transition from the highest levels of the executive branch to the corporate boardroom is raising questions about possible conflicts of interest. It comes fewer than four months after Zinke left a cabinet position overseeing the country’s oil and gas, coal and other natural resources and those companies that profit off their extraction. Zinke told AP that his work for Nevada-based U.S. Gold Corp., which focuses on mining exploration and development, would not constitute lobbying. But the company’s CEO cited Zinke’s

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“excellent relationship” with Exploration the Bureau of Land Management Elko-based U.S. Gold and the Interior Department in Corp. hopes to begin explaining his hiring as a conexploration drilling this year at its Keystone sultant and board member. exploration site in “We’re excited to have SecreEureka County and tary Zinke help move us forward” possibly at its Copper on two pending mining projects, King site near Cheyenne, in Nevada and Wyoming, Edward Wyoming. Karr, head of U.S. Gold Corp., said by phone. The Nevada project, known as Keystone, is on appointees cannot lobby their bureau land in Eureka County’s former agency for at least five Cortez Trend. years after leaving their government post. Nevada Separately, criminal statutes impose one and two-year bans exploration on various kinds of communiAfter the announcement, the cations between senior federal company’s vice president said officials and their former agency, Zinke will be able to offer a lot as said Virginia Canter, chief ethics a board member. counsel of Citizens for Responsi“We’re pleased to have him on bility and Ethics in Washington, the board,” said Dave Mathew- a nonprofit ethics-watchdog. son, the head of exploration for Zinke, who left Interior in U.S. Gold Corp. “I think there are January amid ethics allegations, some good reasons for that from said he sees no conflict in his new every standpoint.” role and will have no direct con“He can assist in ways with tact with his former colleagues at his contacts; people know of the agency. him,” Mathewson said. “I think “I don’t lobby,” he said. “I just overall having somebody of his follow the law, so I don’t talk to credentials is going to be a big anybody on the executive side or help. It will open doors, if noth- influence” anyone. ing else. The government is a Zinke described the inside knowledge he gained at the different world.” Mathewson commented that helm of Interior as an asset Zinke might be able to help as as he moves into the corpothey go through the permitting rate world. process on their Wyoming proj“I understand the process. ect, which is entirely on Wyo- There’s very few former state ming state land. senators, congressmen and secKarr initiated the contact with retaries that know more about Zinke, Mathewson said, and in the process than I do,” said March Zinke and Mathewson Zinke, who served in the Monspent about 45 minutes visiting tana Legislature and the U.S. on the phone. House before being appointed to “I guess he liked what he saw,” lead Interior. Mathewson said. “I think he’s The purpose of federal lobbyvery interested in the business of ing freezes by recently departed mining and the exploration asso- senior officials is “to make sure ciated with mining.” there’s a cooling-off period ... so the former agency is not subject Lobbying to the influence of their former head,” Canter said. restrictions Given the restrictions, she A 2017 executive order from Trump said executive-branch See Zinke, 52

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46 • MINING QUARTERLY • SUMMER 2019

COMMUNITY

Mackay, Newmont

PARTNERSHIP 50 YEARS OLD ADELLA HARDING Mining Quarterly Correspondent‌

‌A

partnership between the Mackay School of Earth Sciences and Engineering at the University of Nevada, Reno and Newmont Goldcorp is marking its golden anniversary of helping students, the Mackay School, the mining industry and Newmont recruitment all these years. “Both Newmont and Mackay get something out of the partnership,” said Melissa Harmon, general manager of Newmont’s Twin Creeks Mine in Humboldt County. Newmont has donated an estimated $8 million to the Mackay School and UNR since 1969, Harmon said. Newmont also was the first mining company to reach the philanthropist level in 2011 for giving $5 million to the university. Jeffrey Thompson, dean of UNR’s College of Science, said Newmont’s donations have “given us a fantastic opportunity,” but there is more than money involved. “It’s almost like being in a family. The intellectual collaboration and friendship are at least as important. They are more than donors. It’s a partnership and has been absolutely remarkable.” Mark Evatz, general manager of Newmont’s Phoenix Mine south of Battle Mountain, said Newmont’s student recruitment starts in advance of graduation, and Newmont has a “robust

JENNIFER SANDE, UNR‌

A Newmont Goldcorp Corp. donation made possible the renovation of the University of Nevada, Reno Mackay School of Earth Sciences and Engineering ventilation laboratory. The lab was renamed the Newmont Ventilation Lab in April 2018. At the dedication from left are: Jeffrey Thompson, dean of the UNR College of Science; Ian Duckworth, regional projects director for Newmont; Melissa Harmon, general manager of the Twin Creeks Mine; Jerry Pfarr, regional vice president of Newmont for sustainability and external relations; Mark Evatz, Phoenix Mine general manager; Kevin Carman, executive vice president and provost, UNR; and John Carothers, UNR’s vice president of development and alumni relations.

internship program so we start to get to know these students. It’s on-the-job training for them, and we get to do a long interview with them. That’s a winwin scenario.” What Mackay students experience working with Newmont Goldcorp “adds to their professionalism. It’s invaluable to us,” Thompson said. The Mackay School of Earth Sciences and Engineering marked the 50th anniversary

with special recognition of Newmont at the school’s banquet in early May, and Harmon was on the stage to receive a framed photo of the Mackay School. At the banquet, Mackay School outlined the company’s support that included help in 2018 with a $50,000 renovation of the school’s ventilation laboratory. The lab has been renamed the Newmont Ventilation Laboratory, which is geared to teaching students about ventilating

underground mines. Charles Kocsis, an associate professor in mine engineering at the Mackay School, said in a video Newmont Goldcorp made for the 50th anniversary that the lab “is possibly the best in North America.” Newmont donations additionally helped to renovate the Arentz Student Center and the Rock Mechanics Laboratory, as well as supporting scholarships, assistantships, travel assistance

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University of Nevada, Reno Mackay School of Earth Sciences and Engineering students are working on a computer this spring on the UNR campus. The Mackay School and Newmont Goldcorp Corp. are marking their 50th year of partnership this year.

and classroom improvements, according to a statement read at the May 3 banquet. The mining company also provides mine tours for Mackay students, stages mock interviews for students looking to work in the mining industry and provides internships for students, Harmon said. In turn, Newmont partners with professors to make sure curriculum matches what the industry needs. “The Mackay School has a very strong, robust program,” Thompson said. UNR was graduating about 20 students in mining and metallurgy in May, about 15 geological engineers and another 30 or so geologists, and “almost all are going into mining professions,” he said. “The mines recruit.” Thompson and Mackay School alumni Harmon and Evatz spoke to the Mining Quarterly in a joint conference call. Evatz has been Newmont’s executive sponsor for the Mackay School partnership but handed the role over to Harmon. Both serve on the school’s executive advisory board as well.

Harmon and Evatz acknowledged that there may be changes in the donor structure because Newmont Goldcorp and Barrick Gold Corp. are finalizing a joint venture for Nevada properties called Nevada Gold Mines. “We’re still evaluating what the JV means. Certainly, Newmont will continue to support the school,” Harmon said. Evatz said even with the JV, the mines will need the talent coming out of Mackay School. “Newmont will continue to recognize that and support Mackay,” he said. “I can’t speak for the joint venture, but Barrick and Newmont always need new talent. The pipeline has to be loaded at the front line.” Evan Klause, an engineer at Twin Creeks who graduated from UNR last spring, said the company’s partnership with Mackay School was important to him. He said the field trips were “very helpful” when he was a freshman, and he learned more about mining as a Newmont intern. Klause is featured in the anniversary video Newmont.

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48 • MINING QUARTERLY • SUMMER 2019

INDUSTRY

Premier optimistic about McCoy-Cove ADELLA HARDING Elko Daily Correspondent‌

‌P

remier Gold Mines Ltd. is pleased with the discovery of high-grade gold mineralization at a drill hole on the McCoy-Cove property south of Battle Mountain. The discovery also impressed joint venture partner Barrick Gold Corp. The company also is planning underground development at the portion of McCoy-Cove that is 100 percent Premier’s, and the company is awaiting gold production from an underground project and pit development at the South Arturo Mine operated by Barrick. “It’s a development year for us,” said Brent Kristof,

COURTESY OF PREMIER GOLD MINES LTD.‌

Small Mine Development is doing the initial underground development work at El Nino at the South Arturo Mine, 60 percent owned and operated by Barrick Gold Corp. and 40 percent owned by Premier Gold Mines Ltd. El Nino is on the Carlin Trend near Barrick’s Goldstrike Mine. The portals are in the Phase II open pit that has been mined out.

senior vice president of operations, who works out of the Reno office for the Canadian-based Premier. The high-grade mineralization was intersected in the first

hole drilled at the Antenna target between the historic McCoy and Cove open pit mines that is part of the joint venture with Barrick and will be part of the new Nevada Gold Mines joint

venture between Barrick and Newmont Goldcorp. “This exciting intersection is on JV ground,” Kristof said. Barrick Chief Executive Officer Mark Bristow talked about the discovery in Barrick’s first-quarter earnings teleconference on May 8, stating that there is new opportunity for the Barrick-Newmont joint venture with discovery of a “very significant intersection” at McCoyCove. “Our geologists are definitely excited. This reinforces the potential of Nevada,” he said. The drill hole has a mineralization zone grading 0.145 ounces of gold per ton, with an interval of 0.555 opt, and another high-grade interval of 0.21 opt.

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The drill hole was lost at 2,380 feet below the surface with gold grading at 0.197 opt so the zone remains open. “Premier and Barrick geological teams have worked closely in identifying high-quality targets that will be tested in the current drill program,” Premier’s president and chief executive officer, Ewan Downie, said in an announcement of the highgrade discovery. In the joint venture at McCoyCove reached in 2018, Barrick holds an option to earn a 60 percent interest in a large block of property by spending $22.5 million by June 30, 2022. Barrick can assume the operator role now that it has spent $6 million. “Barrick may take over management of the joint venture by the end of the year,” Kristof said in a telephone interview. The property in the agreement with Barrick covers roughly 50 square miles.

Going underground Premier maintains 100 percent ownership of the property that includes the planned Cove project, where the company expects to start going underground in the fourth quarter of this year. “We’ve been focusing this year on hydrology work,” Kristof said, including drilling wells and pump testing. “The original intention was to start last fall, but we decided to hold off to do more hydrology work.” He said Boart Longyear drilled two wells 1,600 to 1,950 deep, and the pump testing was just starting. Montgomery and Associates was hired as the hydrology consultant firm. Premier has made engineering designs, such as changing the location for the portal, changing This map shows the boundary lines at the McCoy-Cove project site south of Battle Mountain. One area is 100 percent owned by Premier Gold Mines the location for power lines to the See McCoy-Cove, 50

Ltd. and is where the company plans an underground exploration project. Another boundary shows where the joint venture of Barrick Gold Corp. and Premier is located.

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50 • MINING QUARTERLY • SUMMER 2019

McCoy-Cove From 48

access road and changing the design for the waste dump, Kristof said. After the portal is started, plans call for underground drilling to start in 2020 and begin full feasibility efforts in the fourth quarter of 2020, he said. If the feasibility work points to a mine, development work and underground production would follow, with production possibly in 2021 or 2022. The Cove open pit is roughly 10 miles south of Newmont’s Phoenix copper and gold mine that also will become part of the Newmont Goldcorp and Barrick joint venture. Echo Bay Mines Ltd. mined for gold and silver at Cove between 1987 and 2003.

COURTESY OF PREMIER GOLD MINES LTD.‌

Barrick Gold Corp. is stripping the Phase I mining area at the South Arturo Mine on the Carlin Trend. The company is using autonomous trucks. South Arturo is operated by Barrick, which owns 60 percent, and Premier Gold Mines Ltd. owns the other 40 percent. South Arturo will be part of the Nevada Gold Mines joint venture between Barrick and Newmont Goldcorp.

Carlin near Barrick’s Goldstrike Mine, Premier is spending 40 percent, Barrick 60 percent, in the joint venture to develop an underground mine and for stripping for the Phase I open pit. Barrick is the operator. Barrick mined Phase II before Phase I. South Arturo Two portals have been comAt South Arturo northwest of pleted for the underground mine,

El Nino, and Small Mine Development has been contracted to do the initial development, Kristof said. “They expect to get into ore by July of this year,” he said. “There may be a few ounces to our account this year, but I wouldn’t call it production, but ounces from development.”

Barrick processes ore from South Arturo at Goldstrike. Barrick is using the Phase I pit stripping as a testing ground for its automation project involving driverless haul trucks. Barrick announced a year ago that testing surface autonomous haulage technologies had begun at South Arturo. “It’s kind of exciting. The operator is sitting in a chair,” Kristof said. South Arturo becomes part of the Nevada Gold Mines joint venture between Barrick and Newmont, but Premier will still hold its 40 percent.

Rodeo Creek

Premier also has an option agreement with Ely Gold Royalties Inc. to acquire the Rodeo Creek property adjoining South Arturo roughly six miles northwest from Goldstrike operations and abutting Halliburton’s Rossi barite mine at the

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north boundary. Premier’s option is to acquire 100 percent interest in the project by making payments to Ely Gold of $500,000 over a five-year period, with Ely Gold retaining a 2 percent net smelter royalty. According to Premier, Rodeo Creek is a 510-acre land package. “There was a lot of snow this year. Now, the plan is to go in and do some mapping and soil sampling and geochemistry to vector in drilling. We haven’t decided to do any drilling yet,” Kristof said. Additional Premier exploration projects are the Goldbanks and Rye sites. Premier 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.

exploration project called Greenstone in Ontario that Kristof said has 4 million ounces of gold reserves. Centerra Gold Inc. is earning in 50 percent of the project and should complete the earn-in by next year. Centerra is funding 100 percent of the exploration. Kristof said there may be a production decision in 2020 for Greenstone, which would be a surface mine. A feasibility study is being updated to optimize energy and process costs. “It’s an interesting one. We’re pretty excited about it,” he said.

Mercedes Mine

With all the exploration and development work, Premier has one producing mine, the Mercedes in Mexico. The gold and silver mine is about a 3.5-hour drive from Tucson, Ariz., KrisGreenstone tof said. Premier has another “ We p r o d u c e i n t h e

neighborhood of 85,000 ounces of gold and 240,000 to 255,000 ounces of silver” at Mercedes in a year, he said, and continuing exploration has kept the mine life at four years for some time. Premier acquired the mine in 2016. According to Premier’s first-quarter production report released May 1, Mercedes produced 17,614 ounces of gold and 57,681 ounces of silver, compared with 30,550 ounces of gold and 59,826 ounces of silver in the 2018 quarter, mainly because there is no gold production at South Arturo. “Our objective at Mercedes during the first quarter was to drive development work necessary to support planned production growth for the remainder of the year,” Premier’s executive chairman, John Begeman, said in the production release. Kristof said the Reno office supports the projects in Nevada

and Mercedes in Mexico, but the Greenstone project is under the Canadian office in Thunder Bay, Ontario.

Earnings report

Downie stated in the May 8 earnings report for Premier that “with the next two phases of production under construction at South Arturo and better grades expected in the first half of the year at Mercedes, the company is well positioned to return to higher levels of production and reduced costs in the near future.” In the earnings report, Premier reported a net loss of $900,000, compared with a $2 million loss in the 2018 quarter. Capital expenditures totaled $13.4 million, including $4.6 million for mine development and construction at South Arturo, $2.6 million for development at McCoy-Cove, and the remainder at Mercedes.

52 • MINING QUARTERLY • SUMMER 2019

PEOPLE

TWO HONORED AT Salute to Women luncheon ‌RENO – The Nevada Mining Association recognized Amanda Hilton and Jan Morrison during the 28th annual Salute to Women of Achievement luncheon in Reno on May 23. The event celebrated the passionate and successful women doing great work across northern Nevada. The Nevada Mining Association honored Hilton and Morrison for their leadership and dedication to Nevada mining communities. The Salute to Women of Achievement Luncheon is hosted by the Nevada Women’s Fund. Proceeds from the luncheon fund scholarships for Nevada women at all levels of post-secondary education. Since 1983, the Nevada Women’s Fund has awarded over $7.7 million in scholarships to Nevada women. Dana Bennett, president of the Nevada Mining Association, was

Zinke

administration manager, maintenance manager and was appointed general manager of the operation in Sept. 2017. Hilton is on the Magic Carpet Preschool Board of Directors, Nevada Mining Association Amanda Hilton A fourth-genBoard of Directors, and the Unieration Nevada versity of Nevada, Reno Mackay native, Amanda School Executive Advisory H ilton is the Board, and is a proud supporter general manof the Boys and Girls Club and ager of the Ely Renaissance Society. Hilton KGHM-Roband her husband, Bruce, have two young children and love to inson Mine in Hilton enjoy the outdoor beauty that Ely. She grew up in Reno and Ely, graduating White Pine County offers. from White Pine High School. She earned a B.S. in accounting Jan Morrison from the University of Utah, an Jan Morrison is an economic M.B.A. from the University of development officer for the Wisconsin, and is a Certified Northeastern Nevada Regional Public Accountant. During her Development Authority. After 15 years with Robinson Nevada a decades-long career in the Mining Company, she has been industrial real estate brokerage an accountant, tax manager, and development field, Morrison

a c h i eve d h e r goal of moving to the charming town of Austin, Nevada, where s h e re s to re d a n d a d a p te d residential and Morrison commercial properties from the 1800s. Her time in Austin was highlighted by turning the formerly decaying St. Augustine Church into a 501(c)(3), obtaining over $1 million in grants, resulting in the building being converted into a wonderful community center. Morrison has also worked with the Nevada Commission on Tourism, where she was recognized as the State Tourism Volunteer for 2012. In her current position with the NNRDA in Winnemucca, Morrison works with businesses looking to open in or relocate to the area.

companies in the mining world. Its Keystone project is 20 square miles and is almost entirely on Bureau of Land Management land. The Environmental Assessment for the Keystone property was completed in September 2018. Mathewson said it took about 19 months to complete, which cost the company almost two entire field seasons. “I would like to see the permitting system changed,” Mathewson last December. “It’s discouraging to exploration.” He said the major companies are better able to handle

permitting delays, because they have many projects going at once. However, Mathewson said, nowadays the juniors are often the ones dealing with the delays and expense of a long permitting process. “The juniors are the ones that are leading exploration in Nevada,” Mathewson said. “We have taken over from the majors. The majors are not going into these higher risk areas for various reasons.”

the chair of this year’s luncheon. Named president of the NvMA in 2014, Bennett is the first woman to serve in the position in the association’s 106-year history.

and stock as a board member and under a one-year consulting From 45 contract, Karr said. He will also receive up to $120,000 a year in said Karr’s comment on Zinke’s expenses, according to a comgood relationship with Interior pany filing with the U.S. Securi“just raises questions about what ties and Exchange Commission. he meant.” Zinke previously took two Elko other jobs since leaving Inte- announcement rior: a consultant for Artillery One, a North Carolina-based U.S. Gold Corp. announced private investment company, Zinke’s board appointment in a and an adviser to the Wash- press release with an Elko dateington lobbying firm Turn- line. The company has a small berry Solutions. office in Elko At U.S. Gold, Zinke will receive U.S. Gold focuses on exploa total of $114,000 a year in cash ration and is one of the junior

Mining Quarterly editor Tim Burmeister contributed to this report.

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Exploration spending up in Nevada ADELLA HARDING Mining Quarterly Correspondent‌

‌C

ompanies spent at least $460.1 million exploring for minerals and energy resources in Nevada in 2018, up 31 percent over the 2017 expenditure of $351.2 million, according to a new survey by the Nevada Bureau of Mines. “It’s a reversal of what was a five-year downward cycle, and we have seen that in the number of mining claims, which are over 200,000,” said Richard Perry, administrator of the state Division of Minerals. “It’s really a good news story.” “Nevada is considered a stable and perspective domicile for exploration,” said Perry, whose division, along with the Nevada Commission on Mineral Resources, supported the survey. Most of the exploration companies also reported they planned to spend at least as much this year in Nevada as they have in past years, if not more. The survey of 172 companies actively exploring in Nevada found that 81 percent of them would be spending as much or more as they have in the past. “That bodes well that companies said they would spend the same or more,” said survey author Michael Ressel, an assistant professor and research geologist for the Nevada Bureau of Mines and Geology at the University of Nevada, Reno.

Both Ressel and Perry said the Fraser Institute’s ranking of Nevada as the most attractive investment jurisdiction worldwide in 2018 should give Nevada a boost in marketing the state for exploration and mining. The Fraser Institute’s ranking of Nevada as the top in investment attractiveness is “a huge honor for Nevada. Being number one means people have confidence,” Ressel said. “Nevada has a good track record.” The Fraser Institute, a Canadian think-tank that surveys companies each year, released its report for 2018 in March, so the ranking came after the Nevada exploration survey was done, but Nevada has always had a good ranking. The state placed third overall in 2017, and was first overall in 2014.

Nevada’s potential

“Nevada is great because it’s safer and has potential for discovery. There have still been big deposits discovered in the last 10 years,” Ressel said, pointing to new discoveries on the Carlin Trend and Goldrush and Fourmile near the Cortez Mine. “Premier just announced a really nice drill hole,” he said, referring to Premier Gold Mines Ltd.’s discovery at the McCoyCove property near Battle Mountain, where high-grade mineralization was found in the first hole drilled at a target between the historic Cove and McCoy open

ELKO DAILY FREE PRESS, Elko, Nevada • 55

NEVADA BUREAU OF MINES‌

pits. The discovery is on joint venture property with Barrick Gold Corp. and is to be part of the Newmont Goldcorp-Barrick joint venture for Nevada. Perry and Ressel said Nevada also gained recognition with a booth at the Prospectors & Developers Association of Canada convention in Toronto in March. Nevada’s booth was an economic development platform, marketing the state’s minerals exploration and production potential. “Nevada has done a splendid job selling itself,” Ressel said. “Nevada shows it is really productive.” Rising exploration spending is directly linked to commodity prices. The summary states that exploration spending in Nevada since 2011 mimics global trends tied to commodity prices.

Exploring for minerals Most of the exploration in 2018 — 77 percent — was for precious metals, Ressel said. The survey found that 15.1 percent of the exploration was for base metals; 5.1 percent for energy metals, including lithium and vanadium; and 2.7 percent was for geothermal resources. Exploration for copper was up mainly because of the Pumpkin

Hollow copper mine near Yerington, Ressel said, while there is little if any oil and gas exploration now, and industrial minerals are holding steady. Geothermal exploration also suffered from lower energy prices. Still, Nevada is the second largest geothermal energy producer in the United States, Perry said. The survey also states that Nevada’s exploration spending was 54 percent of the exploration spending nationwide in 2018. Worldwide, Nevada “gets something like five percent of total global spending,” Ressel said. Nevada’s 31 percent hike in exploration spending is significantly higher than the 20 percent increase globally, the survey states, using figures from S&P Global Market Intelligence.

NEVADA BUREAU OF MINES‌

Exploration employment Along with spending, exploration employment rose 21 percent in 2018 to 784 people, compared with 644 in 2017. Still, employment is down from 1,040 employees in 2011. The employment was mainly of geoscientists and technical staff, the survey found. Ressel said the employment See Exploration, 56

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Exploration From 55

figures don’t include vendors, assayers, drillers and other contractors, just direct employment by the companies, “so there is a large component of cash reflected in expenditures but not in employment figures.” The survey also broke down exploration spending to show that 66 percent went toward actual exploration, which is NEVADA BUREAU OF MINES‌ mainly drilling, and 15.1 percent went for land-holding costs, 7.3 percent for permitting and 8.4 percent for corporate expenses. shortage of drillers. “The lion’s share” of exploration spending, including for Mine sites and drilling, contractors, hotels and grassroots restaurants, stays in Nevada, Perry said. He commented that Roughly 61 percent of the drilling companies say there is a exploration spending in 2018

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Exploration From 56

part of anyone’s recipe.” Junior companies that explore for minerals can raise funding more easily if their potential drill holes are near existing mines, he said, and for gold especially, “it’s location, location, location.” There is some grassroots exploration, however, for lithium and vanadium used for batteries, Ressel said. In the survey, he wrote that “exploration activities are burdened with high risk as substantial investments are not guaranteed to result in extractable resources. Indeed, only rarely do exploration programs result in successful resource extraction, and then only after many years of capital investment and development activities. Despite this, exploration success is imperative for the sustainability of natural resource industries in Nevada.” The survey also found that the most important factors leading exploration companies to Nevada are its prospective geology,

potential for new discovery and access to public lands. E x p l o ra t i o n co m pa n i e s responding to the survey reported the negative side of exploration in Nevada include the time and cost for permitting from state and federal agencies and the high cost of mining claims. The negative factors also included the proposed sage grouse and military withdrawals of public lands from exploration. The 172 companies used for the survey included 148 respondents, along with 24 companies whose figures were obtained through public company websites, Ressel said. He used a list of 315 companies, but some of those companies are no longer in business and others didn’t respond. The Nevada Bureau of Mines and Geology conducted the survey for 2017 and 2018 to coincide with Nevada’s legislative session this year. The survey is designed to gauge exploration activities and assess the economic impacts of exploration, including expenditures and employment. See Exploration, 60

ELKO DAILY FREE PRESS, Elko, Nevada • 59

MARKETING

Nevada markets its exploration potential ADELLA HARDING Mining Quarterly Correspondent‌

‌N

evada had a booth at a major convention in Canada for the second year in a row to market the state as a place to explore and mine for minerals, and those involved are enthusiastic about the effort. The booth was at the Prospectors & Developers Association of Canada convention in Toronto in March that PDAC reported drew 25,843 attendees from more than 130 countries. Michael Ressel, an assistant professor and research geologist for the Nevada Bureau of Mines and Geology at the University of Nevada, Reno, said the PDAC booth is the first time Nevada

“Nevada is at the cutting edge with exploration, environmental compliance and a skilled workforce. If a company wants to be global, it needs Nevada talent to get there.” Explorers and investors also are interested in Nevada because it has a “legal system in this country that works, and that doesn’t always happen overseas. There is less risk in Nevada than anywhere else in the world,” NEVADA DIVISION OF MINERALS‌ he said. Nevada’s booth at the Prospectors & Developers Association of Canada The state agencies sharconvention in Toronto in March featured a large chart and map touting ing the booth included the Nevada’s potential for mineral exploration. Nevada Bureau of Mines and has gotten agencies together and mineral exploration, he said. Geology, the Nevada Division “actually selling Nevada.” Nevada Division of Minerals of Minerals, and the Nevada In the past, “Nevada has Administrator Rich Perry said Governor’s Office of Economic always gotten by on its own the booth attracted a lot of vismerits” when it comes to mining itors who were able to see that See Potential, 60

60 • MINING QUARTERLY • SUMMER 2019

Potential From 59

Development. The Geological Society of Nevada, the Nevada Mineral Exploration Coalition and Nevada Mining Association also shared the booth. Perry said the U.S. Bureau of Land Management was involved in planning and sent materials for the booth. A BLM flyer for the booth states that the agency approved 292 active mining plans of operation in Nevada in 2018. “We had great graphics. It was really well done,” said Perry, who reported there was a big banner over the booth and a slick brochure used the theme “Stake Your Claim.” The Nevada Division of Minerals funded the booth. Dave Shaddrick, president of the Nevada Mineral

NEVADA DIVISION OF MINERALS‌

Joel Lenz, mining specialist for the Nevada Governor’s Office of Economic Development, gestures as he talks with visitors at Nevada’s booth at the Prospectors & Developers Association of Canada exhibition in Toronto in March.

Exploration Coalition, said the coalition and Geological Society of Nevada for many years funded and manned a small display booth at PDAC, but now join the Nevada booth. “It was through the efforts of the NDOM (Rich Perry) that the state agencies have been involved,” Shaddrick said, “and

we have been able to expand from the simple display booths of prior years to the truly impressive, professionally done display that highlights all of the exploration related advantages and resources Nevada has to offer.” He said in an email that “Nevada competes for

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The Nevada Division of M inerals and the Nevada C o m m i s s i o n o n M i n e ra l Resources partially fund publication of the survey. The division has a summary of the exploration survey on its website. The exploration survey was highlighted at a booth

investment dollars with all exploration venues around the globe, and our presence at PDAC is a major step forward in getting the Nevada story out to the world.” The convention featured exhibitions, panel discussions, courses, workshops and networking events that included an awards gala and minerals outlook luncheon, along with a visit from Canadian Prime Minister Justin Trudeau, according to a news release from PDAC. PDAC’s president, Glenn Mullan, was quoted as saying the event was among the best in the 44 years he has attended. “Although we continue to face economic challenges and uncertainty, the mineral exploration and mining industry is experiencing a renaissance and renewed sense of confidence, highlighting its resilience once more,” Mullan said.

at the Nevada Legislature on April 24, which was Exploration Day for the legislature. The minerals division sees an increase in funding when there is more exploration since it receives a portion of mining claim fees. Copies of the Nevada Mineral and Energy Resource Exploration Survey for 2017-2018 are available online for free from the Nevada Bureau of Mines and Geology website.

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TOP STORY

Elko Mining Expo features

VARIED EXHIBITS

ADELLA HARDING

Elko Daily Correspondent‌

‌ELKO – Elko Mining Expo is once again bringing a wide variety of vendors, mining professionals, state and federal agency representatives and visitors together for two days of an exhibition that has spread over the years into Elko City Park. This year’s event has 490 booth spaces, including those in the park, and the Elko Convention and Visitors Authority is willing to take last-minute exhibitors, if there is room, according to ECVA events coordinator Erin Myers. “If there is space available, we will try to accommodate anyone up to the time of the event,” she said. The exhibition is from 9 a.m. to 5 p.m. June 6 and from 9 a.m. to 3 p.m. June 7. There will be booths inside the Elko Convention Center, the adjacent conference center, a tent mall, in the parking lots, along College Avenue and Moren Way and at Elko City Park. “We have a lot of returning vendors and a lot of new exhibitors,” Myers said. “We’re going to have a cool exhibit from Container Canopies.” The company sells canopies over containers used in shipping so they can be used for housing equipment, she said. Nevada Division of Minerals, a longtime exhibitor at the event, plans to have copies of the new Nevada Mineral and Energy

Komatsu Equipment Co. claims the entire lawn in front of the Elko Convention Center for equipment displays at the 2018 Elko Mining Expo.

Resource Exploration Survey for 2017-2018 at its booth and expects to have the latest mineral production figures available, according to division Administrator Richard Perry. The Expo displays also again this year will include big mining machinery and haul trucks that always draw the attention of visitors. Vendors will be selling food outdoors at the Expo and the Hilton Garden Inn will have the concession inside the convention center. Table and chairs will be on the event patio for outdoor diners. This year’s Mining Expo won’t have any activities especially geared to children, however,

since school will still be in session, Myers said. This is the first Elko Mining Expo for ECVA Executive Director Katie Neddenriep, who took over in March to fill the shoes of Don Newman, who retired, and she said she is enjoying being on the ECVA side of the event. She worked as an exhibitor when employed with Barrick Gold Corp. “I’m really excited to learn about putting it all together and taking my experience as an exhibitor to make it more exciting for exhibitors,” she said. “We’ve got a great staff at ECVA and great partner companies that make it a success each year.” Neddenriep said the Expo

business partners include United Rentals, Source 1 Events, GES and Old Dominion Freight. The price of gold has had a bearing on the number of exhibitors and attendees in the past, but she said this year’s event is “really not so much the gold price as activity in the industry.” Exploration is up, according to the exploration survey, and there are changes in the air with Newmont Mining and Goldcorp’s merger into the new Newmont Goldcorp, the pending joint venture called Nevada Gold Mines between Barrick Gold Corp. and Newmont, as well as Barrick’s merger with Randgold Resources on Jan. 1. The Elko Mining Expo is the

ELKO DAILY FREE PRESS, Elko, Nevada • 63

biggest event that ECVA puts on each year, and next year will be the Expo’s 35th anniversary, Neddenriep said. The ECVA website states that the annual event attracts close to 8,000 people. When the Elko Mining Expo was in its youth, the event was held at the Elko Convention Center and the center parking lots, but the event space has changed over the years. What was once the back lot is now the conference center building, where more exhibitors have a chance to be indoors. The Expo stretched into the park in later years to handle the overflow. Ten years ago, there were 380 booths, according to the Elko Daily Free Press archives, compared with the 490 booths now. “We get a lot of great feedback. I think people enjoy coming to our Expo. It has a different feel, is open to the public and

uses exterior space. There is a lot to see and do,” Myers said. The Expo kick-off is the Expo Open Golf Tournament at Ruby View Golf Course. The tournament was full over a month before the event. “We even have a waiting list,” Myers said in on May 7. The tournament concludes on June 4 with the awards banquet at Ruby View. June 5 is set-up day for Expo exhibitors, and the opening reception begins at 6 p.m. at Red Lion Hotel and Casino. The $40 reception tickets were being sold online through EventBrite.com in an example of ECVA’s effort to add “a little bit of technology” to the Expo, Neddenriep said. Next year, the plan is to streamline the registration process. Myers said the opening reception is a chance for industry professionals to “mingle and have a Mining equipment is large by most standards, and the scale is emphasized by the 2018 Elko Mining Expo’s smallest visitors. good time.”

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STORY AND PHOTOS BY TIM BURMEISTER Mining Quarterly editor‌

‌“Really what we’re trying to do here is bring the best quality product to the end user at the lowest possible cost,” AMS of the Southwest General Manager David Henderson said recently. AMS of the Southwest is a company with an office in Spring Creek that provides hydraulics and fluid power solutions for mining companies, and Henderson said that being a smaller company in the industry has several advantages. Their overhead is low so they can keep their costs low, and they have the flexibility to do whatever needs to be done to serve their customers’ needs. And Henderson’s extensive knowledge of the industry is another key ingredient in the company’s ability to provide the best quality and service to their customers. “We have more fluidity in what we can offer and what we can do for our clients,” said Lorinda Fallini, the majority owner of AMS of the Southwest. “Where they need something that maybe is a little bit out of the scope of what a larger vendor would be able to provide, we can oftentimes work with them and be a little more malleable in fitting what they need. “Dave recently got a call from Round Mountain, a piece of equipment went down, not necessarily a piece of hydraulic equipment, but they really needed someone to come and

TIM BURMEISTER PHOTOS‌

Amie Miles, Harlan Bellander, Lorinda Fallini and David Henderson, from left, in the AMS of the Southwest warehouse in Spring Creek.

look at it ... and that was on a Friday afternoon.” Henderson was able to help. “Customers are able to call Dave directly and say, ‘Hey I have this problem … is there any way you can help us out?’” Fallini said. “And sure enough, he finds the resources to help them get things taken care of.” Some history The story of the origin of AMS of the Southwest is an illustration of a small company evolving to meet customers’ needs. A lot of people in the area are familiar with AMS — Alternative Maintenance Solutions — a mining and construction repair company. Fallini’s husband, Harlan Bellander, and Bellander’s brother started AMS in 2005. “AMS continued to grow and evolve in the local industry,” Harlan Bellander said. “In 2016 my wife and I had an opportunity

to spin off AMS into AMS of the Southwest, based in Arizona. We were doing a lot of business in Texas, New Mexico and Arizona, and we thought, rather than dilute what we’re doing in Elko, we’ll establish a new company. “And things are going well down there; we’re starting to see growth.” Then another opportunity came up when Bellander was talking with Henderson. “Dave and I have a relationship going back 30 years,” Bellander said. “He was interested in making a change, so we had him come to Nevada, and we looked at what we could do with Dave.” Bellander said that his philosophy is that when a quality person becomes available, you get them on board. “I’m a real team oriented guy,” Bellander said. “When you have a chance to bring in some people

that are at the top of the food chain in their industries, you do it — you do it without question. “I had lunch with a Canadian billionaire years ago, and the best advice this guy ever gave me was, ‘If you have an opportunity to hire somebody who’s quality, don’t wait for the fit — the fit will become apparent very quickly.’” A parts business Henderson’s expertise is in fluid power and hydraulic parts, so the decision was made to make AMS of the Southwest a product business here in Nevada that would be a good complement to the AMS service business. Bellander said his focus remains on AMS and the service end of the business, while Henderson and Fallini focus on the parts and sales end of the business. He said that in the See AMS-SW, 66

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AMS-SW From 64

past couple of years AMS of the Southwest has seen growth and has made strategic alliances with several vendors. Bellander said he knew that Amie Miles was a top quality local person, and after several calls he convinced her to join AMS of the Southwest as the sales manager. Keeping things local and supporting the local community is very important to Bellander. “Lorinda and I are native Nevadans — we’re kind of a minority anymore,” Bellander said. “I was raised three hours south of here in Ely, and Lorinda was raised on a ranch between Ely and Tonopah. “It’s really important to us that we grow this business in Nevada utilizing as many Nevada resources as we can. This is

home, and we want to support the home that we grew up in. We employ as many local people as we can. We apprentice and scholarship local kids, and do whatever we can to give them a chance to stick around. It’s really important to us, more than anything else, that we’re able to do that. Kind of give back to the state that gave to us.” Top quality & low prices Henderson talked about the ways in which AMS of the Southwest is able to provide the mines in this region with top quality products at the lowest prices. “One of the main reasons why I came here,” Henderson said, “is that with the corporate structure today in the fluid power industry, there is such high overhead that the cost of doing business is expensive. With myself and Amie coming here and joining Lorinda at AMS of the Southwest, our overhead is low enough that we can pass that savings on

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to the end user.” Henderson said that his more than 30 years in the industry have provided him with a lot of knowledge about which products are top quality, and have given him opportunities to build strategic alliances with companies that can work with AMS of the Southwest to bring top quality equipment to the mines. “I think what’s interesting about the industry today is that every corporation is structured in a manner that they have to grow,” Henderson said. “If they aren’t growing, they’re dying. So consequently they branch off into areas that maybe aren’t their true focal point.” “You see companies that do things really well, and then you see other products that they provide that just aren’t up to that true quality,” Henderson said. “So with our relationships and our knowledge of the industry, we are able to source out those vendors that do certain things really well, and bring those quality products together and offer those to our end users. So we are that one more step of quality control.” Alliances One of the alliances that Henderson and Fallini are excited about is with Swanson Industries. Swanson is a leading provider of hydraulic cylinder manufacturing, remanufacturing and repair services for the mining industry. AMS of the Southwest works directly with Swanson to provide products and services to Nevada and Arizona. “They started out mainly in the coal industry back east,” Fallini said. “As the dynamic is shifting from coal to metal and nonmetal mining in this area, they’re really redirecting a lot of their resources to be more of a major player in this area. They have a lot of new technologies. It’s going to be nice for the local area mines to be able to draw

upon that resource as Swanson’s shop in Utah becomes more advanced and more productive.” The processes used in Swanson’s shop include laser cladding and industrial chrome plating. “We’re excited about being able to align ourselves with Swanson, because they are the top in what they do,” Bellander said. RexRoth is another supplier that AMS of the Southwest is working with, Henderson said. RexRoth supplies hydraulic pumps, motors and valves to the original equipment manufacturer industry. AMS of the Southwest is a direct provider of some RexRoth replacement and remanufactured replacement products. To provide better service to their customers, AMS of the Southwest now has over a million dollars’ worth of inventory at their Spring Creek location, and they plan to continue to build their inventory. Bellander, Fallini, Henderson and Miles plan to continue to grow both AMS and AMS of the Southwest to expand the ways that the businesses can offer top quality service and products to the mining industry. With the continual changes in the mining industry, including the big joint venture between Barrick and Newmont and all the other efforts to reduce costs to increase profitability and extend mine life, Henderson said AMS of the Southwest will continue to adapt and work with their customers to provide the best new and remanufactured equipment and components at the lowest costs. “We offer options for providing the best solutions to get the most out of their equipment and reduce their overall operating costs,” Henderson said. “And that’s what we’re really excited about. As things tighten up, our company becomes even more valuable to the end user.”

ELKO DAILY FREE PRESS, Elko, Nevada • 67

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Hybrid vigor: training and development ADRIA PULIZZANO for Center for Behavioral Safety LLC

‌T

his quarter, Dr. Boyce is out working with clients just like you and has asked me to serve as guest-author for his column. He sends his best regards to all who have supported his behavioral science-driven proADRIA cesses throughPULIZZANO out the years and encourages others to give them a try. Safety is not a product, a service, or even a well written article. Safety is a behavior interacting with its environment.

As production increases, so do potential near misses. Moreover, even accidents, when analyzed properly, often reveal both system and operator factors contributed to the event. Rarely is a computer program blamed on itself. Never has a computer program chosen to take 100% responsibility for its own behavior and reprogrammed itself to change its course of action. Before we hear any objections to that statement from Elon, Bill or even Woz, let us clarify by saying that an operator created that system, put it into place and ultimately is responsible for maintaining that system. If the software program changed its “mind” and charted another course, it was

only because it was designed to do that by its operator. At the Center for Behavioral Safety, our principal, Thomas E. (Ted) Boyce, Ph.D., instructs workers, their supervisors, managers, and even CEOs on how to apply psychological principles at work to better understand human behavior and gain an advantage in leadership, communication, and yes, even safety practices. This can be done either online or in a classroom. Classroom-based learning can be performed as a lecture or combined with other types of experiential arrangements taking many different forms. We were contacted recently by a local colleague letting us know

that she was now training folks using hands-on experiential training by taking small groups in sailboats out on the San Francisco Bay. Ahoy! I love a good sail. Especially on a lazy, warm, sunny afternoon without too much fog and no smog clouding my view of nature. Sadly, I would not be a good candidate to take her training if the safest times to be in a boat would be very early in the morning, during a foggy chill and for a short period of time. One must always be alert, and no lollygagging on duty. Lauren, I know, has been around the block a few times with environmental services See Pulizzano, 68

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house and the Crystal Springs reservoir are not enough to keep one from dozing. Your body is From 67 telling you that it’s had enough of the environment and needs and working with ports and a break. transportation. I know she You’ll never catch me workwould not let me captain up ing on top of the Sales Force for a three-hour unsupervised Tower for the same reason I’ll tour. I would have to delegate much to make sure I had enough never go parasailing. I do not have the risk-prone gene. I do time to take in the sights and not get thrills from doing those sit for a spell with an ice-cold things. Nevertheless, it’s good to cola contemplating life. We all get outside. We know that sitknow the rocking motion of the boat on the water makes for ting in an office for eight hours is bad for our health; that’s an sweet dreams. obvious one. We also know from What is it about the sun traffic school that second left and the fresh air that makes is more dangerous than far left, being outside for long periods but to be the safest, according of time so dangerous? Don’t drive with the top down in your to statistics, you should drive in the first left of the far right. convertible from Santa Rosa to Here is a fact that is not Palo Alto. Why not? Towards the end of this journey when we so obvious: According to the cleared Daly City and continued Bureau of Labor Statistics, meandering on 280 South, even approximately 84% of U.S. employers are now doing the sights of the Flintstone

in-house training. We do not have data on the sources of training each company chooses from or the type (face-to-face, online, field, etc.). We do know that the availability of online courses and even those you can create yourself are staggering in number, as they can be inexpensive and sometimes free. While your HR team scratches their heads comparing benefits from over 20 different online training platforms or are still searching for an in-house director of learning, consider making sure that your training system is meant to develop and not just to inform. No one should eat pizza for dinner for three nights straight (although Dr. Boyce has tried and succeeded at that a few times). Your health is a factor in your safety. Nor should all your training be only online or only face-to-face, although that may

seem convenient. Research has suggested that multiple modalities of training are best for increasing retention and even behavior change. Let’s get out and explore. If your vendor just sold you a $50,000 piece of mechanical equipment, free training should accompany it. If they forgot to let you know about availability or are too busy to schedule the training, keep on them until it’s done. In addition to Lauren Eisele’s Captain Morgan’s Sail Charters, we also heard about Over the Wall (training) philosophy coined by Andy Papathanassiou. For those of you who do not know who Andy is, he is the “pit crew coach”/athletic director for NASCAR’s Hendrick Motorsports. What’s more exciting than boats and fast cars? We are all about training both teams and individuals.

ELKO DAILY FREE PRESS, Elko, Nevada • 69

have to worry about who is coming and going. It’s not my responsibility to manage that system, so how can I stay safe and be assured that others are doing their job (by coding those cards properly)?” During the workshop we were able to come up with a solution that the participant agreed to act on. Out of about 120 people that day, her comments alone kept popping back up to me hours after I had left the conference. I finally thought about a building I worked in where I helped code security swipe cards to keep “authorized” people in and “unauthorized” people out. I finally remembered talking to the security swipe card dealer once. The conversation was so casual, it was barely a blip 20 years later. He told me that at that time, the failure rate on the swipe cards was about 13

percent. Meaning that some unauthorized folks would get in (!) That fact was known to the card company, had been made known to our management company, and likely was known by the card company’s insurance broker. A plethora of people knew, but I had not been told until more than eight months after I was working there, because access cards were not really my full-time responsibility. That conversation had taken place before the 9/11 attacks on the World Trade Center, and on the other side of the country. I can only assume that swipe card failure rate has improved since then. Since I have not been involved with high-rise security for some time, I did not remember this little-known factoid. I’ll bet that some criminals do not See Pulizzano, 76

2016 016

READERS’

O D & DRI

CHOICE NK

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office settings which are densely populated and at risk for theft, terror or other unwanted entry hazards. Thus, if someone who is not actually responsible for doing so randomly comes to work a few minutes early and checks common area doors, that may prevent issues, and in some extreme cases, it could even save lives. We are told to rely on security staff for security related issues. However, I have not always relied on security to manage security related concerns, as I believe doing so would put me at risk. As much as third-party or in-house specific type of staff are paid, they are not as interested in your health and safety as you are. Let us return to this heckling (but professional) woman. She kept repeating: “We have a secure system that uses a swipe card in the elevator, so we never

A couple of years ago I was speaking in front of two very enthusiastic groups in Santa Clara County. There was a woman in the second group who I would have normally said was being heckling — although she did this in a professional way. My workshop was about individuals taking responsibility for safety at work. I’ll ask you the same question I asked them: “You’re not getting paid to do so, but would you arrive 15 minutes early for work on occasion and walk around your office building to make sure all exit doors were securely closed?” If checking common area doors was not in — or was even well out of — your job description, the common answer would be “no.” But, in that moment, to those to whom I was speaking this idea or concept struck a chord. These conference attendees were in downtown

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More on tariffs We also pointed out that, like most economists, we think tariffs are generally a bad way to conduct trade policy for couple of issues ago I wrote about steel tariffs a number of reasons: they and their impact on the can lead to retaliation which mining industry. is bad, they disrupt supply chains (also bad), and usually I just looked smack of corruption and croback at the piece and would nyism. In short, tariffs bad, summarize it by free trade good. That’s pretty generally accepted convensaying that the real point of the tional wisdom. JOHN But, our President calls steel tariffs was DOBRA himself a “Tariff Man,” which to get China’s earns him the derision of all attention and the really smart guys and gals get them to the table to talk (RSGG), the purveyors of the seriously about trade policy.

JOHN L. DOBRA, PH.D. Mining Quarterly contributor‌

‌A

conventional wisdom on the editorial pages of the Wall Street Journal, NY Times and all the cable news channels (even Fox News). These are the same RSGG who said he could never be elected president but, I digress. So, how did that work out? Well, China came to the negotiating table. And, after months of polite talks, a deal hammered out details that would have required China to observe normal rules of commerce, like respecting contracts and property rights, and made the deal enforceable.

Get

Then China got cold feet. They decided that they really preferred stealing our patents, reneging on contracts when it suits their purposes, forcing U.S. companies in China to take on Chinese partners, etc., because …, well that is what they’ve always done and got away with. And besides, nobody has ever tried to make them follow normal rules of commerce before. And who is this Trump guy, Mr. Tariff Man, telling them what to do? Chairman Xi is president for life. Tariff Man won’t be around long. So,

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To put the question in a different perspective, China’s $600 billion sales in the U.S. are roughly equivalent to Walmart’s sales. If Walmart raises its prices 25 percent, who is that going to hurt more, you or Walmart? So much for the RSGG. screw you, Tariff Man! The result? Tariff Man said “OK, you just screwed yourself.” In addition to the tariffs on steel, we’ll put big tariffs on everything you sell to the US. In short, the Chinese miscalculated. The RSGG in the press began hyperventilating and issuing dire warnings of imminent doom. The stock market took a one-day dive. Reach for the smelling salts! OMG, THE END OF THE WORLD IS NIGH!!! Relax, you will be fine. The last line of my last column on tariffs pointed out that trade negotiations “are a lot like breeding elephants – there is a lot of grunting and roaring, it all takes place at a high level, and it takes years to find out what happened.” This time seems a little different— it’s getting down and dirty— which makes it a little more fun to watch with the warning that you keep a safe distance.

Tariffs 101

So, let’s back up to square one. Like we said at the beginning, tariffs are generally a bad idea. If we lived in a world without tariffs, imposing tariffs would be stupid. Tariffs are nothing more than a tax imposed on

goods crossing borders, so the first problem with tariffs are that they are arbitrary taxes that are generally unrelated to the need to raise revenue. Worse, they generally reflect cronyism and corruption in commerce or, to use an old fashioned term, mercantilism – the very thing that inflamed American colonists against King George III. The Boston Tea Party was essentially a protest against tariffs. But we don’t live in a world without tariffs. Since the end of WWII the U.S. has accepted a world trading system, which includes tariffs and non-tariff restrictions, biased against our interests. Why? Because it was in our long run interest to help Europe, Japan, and the rest of the world rebuild and get wealthier. Very simply, the better off they were, the safer we thought we were. Tariff comparisons are difficult to make because they are usually imposed on individual goods rather than all goods from individual countries like what is now being proposed for China. But there are lots of individual comparisons available. U.S. cars are taxed at a 25 percent See Dobra, 74

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Dobra

that the U.S. has some of the lowest tariffs in the world. But the obvious problem From 73 with the rationale behind rate going into China; Chinese this regime is that WWII was over 75 years ago. Europe and cars and parts shipped to the U.S. are taxed at a 2.5 percent Japan have recovered and new actors like China have entered rate. This led GM to produce the fray. Questions about the its Cadillacs, the most popfairness and usefulness of the ular U.S. car in China, at a GM plant in China. Canadian post-WWII order have been bubbling up since the 1980s. dairy products enter the U.S. Mr. Tariff Man himself has tariff free; Wisconsin butter been a vocal critic of trade polis taxed at almost 300 percent. European cars enter the icy since the 1990s, long before he probably thought seriously U.S. with a 2.5 percent tariff; about running for president. U.S. cars enter Europe with a 10 percent tariff. The list goes on. Final questions The result of our acquiThis raises two final escence to this trade regime questions. In the discussion is illustrated by a recent of steel tariffs we said that Pew study (https://www. the point was to get China’s pewresearch.org/factattention and get them to the tank/2018/03/22/u-s-tariffs- table to talk. OK, that worked. are-among-the-lowest-inNow we have to see if the the-world-and-in-the-naelephants can actually get tions-history/) which showed something done.

Second, how does this affect you? Tariffs are a tax that the RSGG will tell you will be paid by American consumers. China sold about $600 billion to U.S. consumers in 2018, so a 25 percent tax would amount to about a $150 billion tax increase. The RSGG say that will be paid by American consumers, but, to be more precise, it will be paid by American consumers who buy Chinese goods. If you are buying Chinese stuff because it’s cheaper, you probably won’t buy it anymore because it will be 25 percent more expensive. If Chinese goods aren’t 25 percent more expensive after the tariffs, that will mean that importers and producers have absorbed the tax, not you. Thinking about it, I can’t think of anything I buy that only comes from China. That means Chinese producers have very little ability to

pass the tax on to us. To put the question in a different perspective, China’s $600 billion sales in the U.S. are roughly equivalent to Walmart’s sales. If Walmart raises its prices 25 percent, who is that going to hurt more, you or Walmart? So much for the RSGG. However this shakes out, we are only talking about taxes of less than one percent of our $20 trillion GDP – “much ado about almost nothing.” But, for the Chinese, it’s a much bigger deal. The U.S. has been their piggy bank for the last few decades and Mr. Tariff Man has gotten their attention

Dr. Dobra is a professor of economics, director, Natural Resource Industry Institute, University of Nevada, Reno, and senior fellow, Fraser Institute.

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COLUMN

The importance of the supply chain ‌T DANA BENNETT, PH.D. his June, people from all over the world will gather in northeastern Nevada for the 34th annual Elko Mining Expo. This popular event provides an excellent opportunity to network and share best practices. It is DANA also an excellent BENNETT reminder that a large and diverse group of businesses provide critical support before, during, and after mine production. Mining operations and mining vendors together comprise a global and comprehensive industry supply chain.

Nevada mines operate 24 hours a day, 7 days a week, 365 days a year and are staffed by highly skilled, highly trained employees who keep these complex facilities functioning at a high level. Complex jobs come with complex problems, however. When issues do arise, solutions typically involve more than a trip to the nearest home improvement store. Many times, these challenges can be addressed only with a specific piece of equipment or the skill set of a specialized professional. That’s where the supply chain comes into play. Mining vendors, whether multinational corporations or sole proprietor specialists,

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are critical to the continued operation of a mine. They are also engaged in exploration, mine planning, construction, processing, reclamation, and closure. From the moment of first discovery to the moment of final depletion, many links along the mining supply chain are involved in a variety of ways. In the process, mining vendors are often the source of new technologies and improved systems that allow mines to continue extracting ore for a much longer period of time than at any previous point in mining history. A longer production time is certainly a benefit to nearby mining communities. Thousands of Nevadans are currently employed throughout

the mining supply chain, living and working in all of Nevada’s 17 counties. Many hundreds more consistently and frequently travel into Nevada from out of state and out of the country to do business with the Silver State’s original STEM industry. The significance of the supply chain is reflected in the Nevada Mining Association’s own history. Founded as the Nevada Mine Operators Association in 1913, the Association expanded its membership to the vendor community in 1953 and changed its name to reflect the larger universe of mining-related businesses. The decision reflected an industry increasingly reliant See NvMA, 76

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multi-located businesses headquartered in the nation’s largest cities to mom-and-pop shops From 75 in Nevada’s small mining towns. Most are located here in Nevada, on the services provided by but many of our members are non-operators and on a wide located in nearby states. Some variety of mine equipment. It also reflected the growing com- are located in other parts of the plexity of the mining industry as world. All of them recognize the economic opportunity available a whole. in Nevada and the importance of Today, nearly 400 members the NvMA to their success. of the Nevada Mining AssociA major focus for NvMA is to ation (NvMA) are companies create networking opportunities that provide goods or services needed by mine operators. These for vendor members to meet and do business with mine operators companies range in size from

and — perhaps just as important — with each other. Today’s NvMA member roster reflects on just how many links are now part of the mining supply chain. Our members include companies selling 400-ton equipment, sole proprietor geologists, law firms, and even golf courses and hotels. Mining is woven throughout Nevada’s economy, which is reflected in the diverse membership of NvMA. Every June, the Elko Mining Expo is the best place in the West to meet those companies,

Pulizzano

three nights a week.

From 69

forget, because knowing that failure rate makes them more successful. Bottom line: The only way to keep from falling into a

state of inertia is to do things differently. Be purposeful. For example, if you don’t share articles from Mining Quarterly already, we encourage you to do so. Then, try something else out of your wheelhouse. In the end you will keep getting better about not eating pizza

civiL WaSTe ManageMenT

and I am grateful to the Elko Convention and Visitors Authority for consistently providing a robust Expo experience. If you are attending this year’s Expo (and why wouldn’t you be?), please be sure to stop by NvMA’s booth to say hello. The NvMA staff is looking forward to greeting old friends, meeting new members, and continuing to strengthen Nevada’s mining supply chain.

Dana Bennett, Nevada Mining Association president

necessary to bring precision teaching, passion, and rigorously tested behavioral science The Center for Behavioral to business and industry. Safety was founded in 2002 by Boyce’s repertoire includes Thomas E. (Ted) Boyce, Ph.D. in over 18 courses which can be Reno, Nevada. Operations have and are usually customized. expanded over the years and Our free training videos are combined experiences have available on You Tube. www. provided him with the skill set thomaseboyce.com

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MINING COMPANIES REPORT Q1 RESULTS Select abridged reports

Barrick earnings‌

Barrick Gold Corp. reported first-quarter earnings that were the first after the company’s Jan. 1 merger with Randgold Resources. The company’s net earnings slipped, but adjusted net earnings were higher than the 2018 quarter and beat analyst projections. The Toronto-based company posted net earnings of $111 million, or 6 cents per share, compared with $158 million, or 14 cents per share,

i n t h e 2 0 1 8 q u a r te r, a n d adjusted net earnings of $184 million, or 11 cents per share, up from $170 million last year, 15 cents per share. Analysts had expected 9 cents per share, rather than the 11 cents for adjusted net earnings. Barrick Chief Executive Officer Mark Bristow said in a teleconference that earnings for the first quarter were skewed because of the Randgold merger, but “we certainly got off to a good start.” He said, however, that speed in merger adjustments is “not necessarily of the essence when playing the long game. Don’t look for instant gratification or easy pickings.”

Barrick also declared a dividend of 4 cents payable on June 17 to shareholders of record on May 31. Graham Shuttleworth, Barrick’s senior executive vice president and chief financial officer, said the dividend reflected Barrick’s profitability and financial strength and was in line with a commitment to shareholders for the $6.1 billion acquisition of Randgold. Gold production totaled nearly 1.37 million ounces in the quarter, up from nearly 1.05 million ounces in the 2018 quarter, including 575,000 ounces of gold in Nevada, up from 517,000 ounces in the first quarter of last year. The Cortez Mine in Crescent Valley produced 262,000

ounces, compared with 285,000 ounces in the 2018 quarter, while Goldstrike operations north of Carlin produced 233,000 ounces, up from 186,000 last year in the first quarter, and Turquoise Ridge in Humboldt County produced 77,000 ounces for Barrick’s 75 percent share, 67 percent higher than the 46,000 ounces in the 2018 quarter. Newmont holds 25 percent interest in Turquoise Ridge and processes gold from the underground mine at its nearby Twin Creeks Mine nearby. Bristow said in the teleconference that Barrick has dropped the Barrick Nevada See Reports, 78

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Reports From 77

practice of lumping Cortez and Goldstrike production together. Barrick reported construction of a third shaft is on schedule at Turquoise Ridge. Barrick also stated the Fourmile gold discovery that is expected to eventually be consolidated with the Goldrush project near the Cortez operations is shaping up as the next mega-mine in the Nevada portfolio of mines. Exploration drilling resumed in January. “Fourmile and Goldrush are classic Carlin-style orebodies of the kind that has made this region one of the world’s most prospective,” Rob Krcmarov, executive vice president of exploration and growth for Barrick, said in the earnings report. “A n o t h e r i s Tu rq u o i s e Ridge, adjacent to the Twin Creeks Mine and included in the joint venture, which we anticipate is also on the way to becoming a tier one asset. We feel strongly that Nevada still holds enormous potential for major discoveries,” he said. The joint venture called Nevada Gold Mines now being finalized by Barrick and Newmont Goldcorp doesn’t include Fourmile while Barrick continues exploration and goes through the feasibility stage to determine whether to mine the deposit, but Bristow said there will be opportunity later to fold it into the joint venture. Cost of sales companywide was $947 per ounce of gold, up from $878 per ounce last year, and total cash costs were $631 per ounce, up from $573 in the 2018 quarter. Nevada’s cost of sales was $780, down from $829 last year, and cash costs were $542, up from $533 in the 2018 quarter.

Barrick reported its realized gold price was $1,307 in the 2019 quarter, compared with $1,223 per ounce last year. Copper production totaled 106 million pounds for the quarter, up from 85 million pounds in the 2018 quarter. Barrick is continuing the Randgold merger process, and Bristow said Barrick has gone “a long way towards integrating the organizations, streamlining the processes and ensuring that all sites have the geological, operational and technical capability to meet their business objectives.” One aspect of the integration has been deciding what assets Barrick will sell because they don’t meet the company’s criteria as gold producers, according to the report, but the company isn’t ready to name which mines in which countries. Bristow said the market would be notified when the time is right, but Barrick plans to work with stakeholders and with the countries where mines might be sold. The hope is to raise $1.5 billion with the asset sales.

Newmont Goldcorp‌ Newly named Newmont Goldcorp announced earnings for the first quarter that were down from last year, largely due to costs involved in the Newmont-Goldcorp merger and work on the joint venture with Barrick Gold Corp. for Nevada operations. The joint venture is still u n d e r d eve l o p m e n t , b u t Newmont Mining Corp. and

Goldcorp Inc. officially merged April 18, changing the name to Newmont Goldcorp. Newmont Goldcorp reported net income from continuing operations of $113 million, or 21 cents per share, in the first quarter of this year, down $170 million, or 32 cents, from the 2018 quarter, and attributed the drop not only to the merger and joint venture costs but also to lower realized gold prices. The average realized price for gold was $1,300 per ounce, down $26 per ounce from the 2018 quarter, according to the earnings report. The lower gold price was partially offset, however, with higher gold production in the quarter of 1.23 million ounces, compared with a little more than 1.2 million ounces last year in the first quarter, at a cost applicable to sales of $701 per ounce, up 6 percent from last year. Colorado-based Newmont’s adjusted net income of $176 million for the quarter also was down but beat Wall Street expectations. The adjusted net income was 33 cents per share, compared with adjusted net income of $185 million, or 35 cents per share, last year. A survey by Zacks Investment Research of seven analysts showed an expectation of 26 cents per share. “We delivered $349 million in free cash flow in the quarter while meeting production and cost targets on the back of continued operational excellence,” Newmont Goldcorp Chief Executive Officer Gary Goldberg said. “This performance gave us the means to deliver superior shareholder value in the form of a special dividend and to build a stronger future by advancing profitable projects on three continents and by progressing two historic transactions.” New m o n t G o l d co r p o n

the same day as the earnings report announced a dividend of 14 cents per share, and that the company would be paying a one-time special dividend of 88 cents. The special dividend was an enticement for Newmont shareholders to vote on the merger, and Goldberg at the time tied it to the savings expected with the Barrick-Newmont joint venture. “ O u r j o i n t ve n t u re i n Nevada will generate synergies and create the world’s largest gold mining complex, and our combination with Goldcorp will create the world’s leading gold business as measured by assets, prospects and people,” Goldberg said in the April 25 earnings announcement. The first-quarter results don’t include Goldcorp figures because the merger came later, but Newmont’s executive vice president and chief financial officer, Nancy Buese, said the earnings report for the second quarter will incorporate figures from the operations that came to the company with the Goldcorp merger. She also said in the earnings teleconference that results from the Barrick-Newmont joint venture will be reported as a separate entity once the deal is closed, with Barrick in the lead creating financial statements. For North America, Newmont Goldcorp stated that go l d p ro d u c t i o n to ta l e d 474,000 ounces in the first quarter, down from 490,000 in the 2018 quarter, with all but 81,000 ounces in the 2019 quarter coming from Nevada operations. The Cripple Creek & Victor Mine in Colorado produced the 81,000 ounces, compared with 71,000 in the 2018 quarter. The figures show the Carlin operations produced 218,000 See Reports, 80

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ounces, down from 231,000 in the 2018 quarter; the Phoenix Mine, 49,000 ounces of gold, down from 62,000 ounces in the first quarter of last year; Twin Creeks Mine, 74,000 ounces, down from 81,000 ounces; and Long Canyon, 52,000 ounces, up from 45,000 last year. P h o e n i x a l so p ro d u ce d 8,000 pounds of copper, up from 7,000 last year, and the company president and chief operating officer, Tom Palmer, said Phoenix is “shifting to high-grade copper zones and away from gold.” Total copper production companywide was down 17 percent to 10,000 metric tons for the first quarter. Palmer also said in the earnings teleconference that

the Chukar underground mine north of Carlin will resume operations in June. Chukar mining ended when a giant slide of a pit wall at the Gold Quarry Mine last year affected access to Chukar, which has its entrance in a pit wall. He said remediation at Gold Quarry continues, and Carlin operations delivered a steady performance in the first quarter. North American operations mined at an average cost applicable to sales of $787 per ounce, compared with $765 per ounce in the 2018 quarter. Cost were lowest at Long Canyon near Wells, at $391 per ounce, up from $357 in the 2018 quarter, according to the earnings report. Although Goldcorp results weren’t included for the first quarter, Palmer said Goldcorp’s performance for the quarter was as expected, and

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he said the merger was “by far the smoothest” of any he has been involved with mainly because of an alignment of the company cultures. Still there are a couple of problems to work out with the former Goldcorp operations. Newmont Goldcorp is only in the “early stages” of investigating and determining repairs after a conveyor fire at the Musslewhite Mine in Canada, Palmer said. The fire happened March 29 during a shift change so there were no injuries. Newmont Goldcorp additionally temporarily shut down the Penasquito Mine in Mexico because of barricades by protesters. Protests involved water supply issues, Palmer said in the teleconference.

Kinross Gold‌

Kinross Gold Corp. reported net earnings of $64.7 million, or 5 cents per share, and adjusted net earnings of $83.3 million, or 7 cents per share, in the first quarter, a major drop from the first quarter of 2018, but the company’s president and chief executive officer, J. Paul Rollinson was optimistic. “We had an excellent first quarter built on strong operational performance and disciplined cost management.

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We continue to maintain our financial strength and solid liquidity and are once again well positioned to deliver on our annual production and cost guidance for the year,” he said in the earnings report issued from headquarters in Toronto. The reported net earnings of $64.7 million for the 2019 quarter compared with earnings of $106.1 million, or 9 cents per share, in the first quarter of 2018. The decrease was mainly a result of lower o p e ra t i n g ea r n i n gs, pa rtially offset by a decrease in income tax expense, according to Kinross. The adjusted net earnings of $83.3 million compared with adjusted net earnings of $125.2 million, or 10 cents per share, for the first quarter of 2018. Kinross listed key points of the first quarter of this year, compared with the first quarter of last year. These included: Production: Kinross produced 606,031 attributable gold equivalent ounces in the first quarter of 2019, compared with 653,937 ounces in the first quarter of 2018. Production cost of sales: Production cost of sales per gold ounce was $682 for the first quarter of 2019, compared with $658 for the first quarter of 2018. Production cost of sales per ounce on a See Reports, 82

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by-product basis was $668 in 2019, compared with $644 an ounce last year, based on first-quarter 2019 attributable gold sales of 584,427 ounces and attributable silver sales of nearly 1.11 million ounces. A l l - i n s u s ta i n i n g cos t : All-in sustaining cost per gold equivalent ounce was $925 in the first quarter of this year, compared with $846 in the 2018 quarter. All-in sustaining cost per ounce on a by-product basis was $917 in the 2019 quarter, compared with $835 in the first quarter of 2018. Revenue: Revenue from metal sales was $786.2 million in the first quarter of 2019, compared with $897.2 million during the same period in 2018, mainly due to a decrease in gold equivalent ounces sold and a lower realized gold price. Average realized gold price: The average realized gold price in the first quarter was $1,304 per ounce, compared with $1,330 per ounce in the 2018 quarter. O p e ra t i n g c a s h f l o w : Adjusted operating cash flow was $230.8 million for the first quarter of 2019, compared with $363.7 million for the first quarter of 2018, mainly as a result of a decrease in margins due to a lower realized gold price. Net operating cash flow was $251.6 million for the first quarter of 2019, compared with $293.5 million for the 2018 quarter. Capital expenditures: Capital expenditures totaled $264.8 million, compared with $246.9 million for the same period last year, mainly due to increased spending at U.S. projects offset by lower spending at Tasiast in Mauritania. Looking at Nevada, Kinross reported gold production of

85,135 ounces in the first quarter, down from 97,083 ounces in 2018 at the Round Mountain Mine in Nye County. Production at the Bald Mountain Mine in White Pine County totaled 47,255, a big drop from 93,440 ounces in the 2018 quarter. Production costs of sales was $670 per ounce at Round Mountain, down from $681 per ounce in the first quarter of 2018, and $675 per ounce at Bald Mountain, compared with $470 in the 2018 quarter. The company stated that production at Round Mountain was lower than the first quarter of 2018 mainly because of lower mill grades. There were few ounces from the heap leach pads and lower mill throughput, compared with the fourth quarter of last year, as well. Cost of sales were lower mostly due to a decrease in operating waste mined. At Bald Mountain production was lower in the 2019 quarter due to the timing of ounces recovered from the heap leach pads and cost of sales was higher as a result of a decrease in gold produced from the heap leach, partially offset by lower operating waste mined. Kinross reported the Round Mountain Phase W project is nearing completion, with Phase W ore now being placed on the newly completed leach pad, and the Bald Mountain Vantage Complex is well-advanced, with commissioning of processing facilities under way. Ore is now being placed on the leach pad. Rollinson said the company’s three largest operations, Paracatu in Brazil, Tasiast in Mauritania and Kupol in Russia all exceeded expectations. “At Paracatu, improved grade control, mill efficiencies, high recoveries and lower power costs resulted in record quarterly production and the

lowest production costs since 2010. Tasiast set another production record in the quarter and costs continued to decline. Kupol continued its consistent high performance and delivered yet another strong quarter,” he said in the first-quarter earnings report. At Fort Knox in Fairbanks, the Gilmore project is on schedule and heap leach construction activities are ramping up, Rollinson said.

Coeur Mining‌

Chicago-based Coeur Mining Inc. reported first-quarter revenue of $154.9 million, and a net loss from continuing operations of $24.9 million, or 12 cents per share. Adjusted net loss was $23 million, or 11 cents per share. The company stated it took a write-down of $15.4 million in the quarter ending March 31. “First quarter operational and financial results were consistent with our expectations,” said Mitchell J. Krebs, president and chief executive officer. “Although Silvertip’s ongoing ramp-up remains a near-term drag on our free cash flow and liquidity levels until it achieves steadystate, our balanced portfolio of operations are advancing several key initiatives that are expected to help us achieve our objective of returning to positive cash flow in 2019.” Silvertip in British Columbia went into production in September of last year. At the Rochester Mine in Nevada, first-quarter silver and gold production yearover-year decreased 17 percent and 28 percent, respectively. The company stated that lower production was driven by lower ore placement rates due to abnormally high snowfall

“First quarter operational and financial results were consistent with our expectations.” Mitchell J. Krebs, president and chief executive officer

levels, which had large impact on gold production. Silver production was partially offset by higher residual leaching rates from the Stage III leach pad, and Coeur reported installation of a high-pressure grinding roll unit remains on-budget and on-schedule with commissioning activities under way in May at Rochester. Crushing rates and silver recoveries are anticipated to increase beginning mid-year, with full ramp-up expected during the third quarter. Coeur is maintaining fullyear 2019 production guidance of 4.2 million to 5 million ounces of silver and 40,000 to 50,000 ounces of gold at Rochester, with the high-pressure roll grinding unit and new secondary crusher expected to result in higher production in the second half of the year. Costs applicable to sales are expected to be $650 to $750 per gold ounce and $9 to $10 per silver ounce in 2019. Companywide, Core reaffirmed full-year 2019 production guidance of 334,000 to 372,000 ounces of gold, 12.2 million to 14.7 million ounces of silver, 25 million to 40 million pounds of zinc and 20 million to 35 million pounds of lead. Other key highlights provided by Coeur included: • Production on-track to achieve full-year guidance ranges, and full-year financial and operational results are expected to benefit from higher second half production driven by the anticipated impact of See Reports, 84

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high-pressure grinding roll technology at Rochester Mine, higher recovery rates and production levels at Palmarejo in Mexico and improved plant performance and higher grades at Silvertip. • Strong operating cost performance occurred across the company’s portfolio, with first-quarter adjusted costs applicable to sales at each operation either below or in-line with full-year guidance ranges. Site-level unit costs expected to trend lower due to higher expected second half production levels. Costs were: • Improved results were seen at Silvertip with continued focus on achieving positive cash flow. Although slower than originally expected,

results at Silvertip improved quarter-over-quarter. March 2019 represented the strongest month of performance since acquisition, with revenues more than doubling in the first quarter. C u r re n t a rea s o f fo c u s include sustaining consistent levels of mill availability to allow for recovery rate optimization, accelerating underground development rates to enhance mining flexibility and access to higher grade ore, and workforce training and retention initiatives. • Kensington in Alaska is now shifting focus at Jualin from development activities to production. Mining activities at Jualin transitioned from development to production during the first quarter, with the high-grade deposit contributing roughly 10 percent of Kensington’s production at an average grade of 0.41 ounces per ton.

Jualin is expected to account for approximately 20 percent of Kensington’s total production in 2019. Higher mining rates from Jualin are expected to contribute to higher production levels and lower unit costs throughout the remainder of 2019. Coeur reported the realized gold price in the first quarter of 2019 was $1,251 per ounce, down from $1,268 per ounce in the 2018 quarter. The average silver price in the first quarter was $15.22 per ounce, down from $16.70 in 2018 quarter.

$5.7 million, compared with a $2.32 million loss in the first quarter of last year, and adjustable net income of $17.2 million, or 14 cents per share, compared with $5.66 million, or 5 cents per share, in the 2018 quarter. Paul Benson, president and chief executive officer of SSR, said in the earnings report that “pleasingly, we had a strong first quarter with near-record consolidated production of over 112,000 gold equivalent ounces at lower cash costs, driven by solid performance at all three operations.” He said the Seabee Gold Operations in Canada achieved record production at near-record low cash costs, while the Puna Operations in Argentina saw production and costs benefit from a full quarter of processing higher grade SSR Mining‌ SSR Mining Inc. reported Chinchillas ore and increasing first-quarter net income of byproduct credits.

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In Nevada, the Marigold Mine at Valmy produced 53,151 ounces of gold in the first quarter, compared with 42,960 ounces in the first quarter of 2018, and SSR reported Marigold has started mining the next phase of the Mackay open pit, resulting in shorter haul distances. The savings in hauling distance helped offset bad weather, SSR stated. SSR stated that the primary objective for exploration work this year at Marigold is to explore the north and south extensions of Red Dot and the western area of the Mackay open pit. Activities in these areas have the potential to discover additional mineral resources due to their proximity to existing resources, SSR reported. The company drilled 70 reverse circulation holes in the quarter. SSR also said that there were 12 core holes drilled at Red Dot to advance the mineral resource to mineral reserves, and plans in the current quarter are for drilling at the East Basalt and Valmy targets. Cash costs at Marigold averaged $812 per ounce, up from $720 per ounce in the first quarter of last year. Vancouver-based SSR also provided highlights of the quarter ending March 31. • Increased production at lower costs: Achieved quarterly consolidated production of near record 112,513 gold equivalent ounces at cash costs of $712 per payable ounce of gold sold. • Low-cost record production at the Seabee Gold Operation: Produced 31,183 ounces of gold at cash costs of $467 per payable ounce of gold sold, second lowest quarterly cash costs since acquiring the operation in 2016. • Doubled silver production with lower costs at Puna Operations: Produced 2.4 million

ounces of silver at lower cash costs of $9.94 per payable ounce of silver sold, with the processing of higher grade silver ore from the Chinchillas mine. • Chinchillas Mine ramp up substantially completed in Argentina: The Chinchillas mine was substantially completed during the quarter on budget. Focus is now on achieving steady state production.

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Hecla Mining‌

Hecla Mining Co. is reviewing its Nevada operations because of disappointing performance, the company’s president and chief executive officer, Phillips S. Baker Jr., said in the first-quarter earnings report that showed a $25.5 million net loss for the company. “ W h i l e Neva d a o p e ra tions had better development advance rates, the operating metrics, including cost, grade and negative cash flow, were unacceptable. We are reviewing our Nevada operations to determine the best path forward and expect results of this review in the second quarter,” Baker said. “In the meantime, we are suspending our annual Nevada estimates for production and cost. We are maintaining our annual estimates for capital and exploration spending to maintain our liquidity and balance sheet,” he said. The earnings report stated that Hecla is demobilizing the mining contractor, mining some previously developed remnant stopes at Midas and considering other alternatives to improve the cash flow at the Nevada operations. The Coeur d’ Alene, Idaho-based company men t i o n s a l te r n a t ive s u n d e r consideration as third-party See Reports, 86

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Reports From 85

processing, reducing development and changing grade-control procedures. Hecla operates the Midas and Hollister mines in Elko County and the Fire Creek underground mine in Lander County and owns the Aurora mill in Esmeralda County. Hecla acquired the operations from Klondex Mines Ltd. in July of 2018. Hecla posted a companywide net loss of $25.5 million, or 5 cents per share, in the first quarter, compared with a gain of $8.2 million, or 2 cents per share, in the 2019 quarter. The loss applicable to common shareholders was $25.67 million, compared with $8.1 million in the 2018 quarter. The company stated that the loss in the first quarter was primarily due to losses from Nevada operations totaling $13.8 million. “Because of Greens Creek’s exceptional performance, Hecla’s first quarter was largely as expected, financially,” Baker said in the report. “Greens Creek exceeded expectations for both gold and silver production due to high grades and recoveries.” Greens Creek is in Alaska. In its separate production report, Hecla said Nevada operations produced 10,364 ounces of gold and 67,438 ounces of silver in the first quarter. The company also stated that during the quarter, the focus continued to be establishing a robust development program in a variety of ground conditions at Fire Creek and Hollister, rather than on production. The company also stated that production was expected to be higher at Fire Creek and Hollister in the second half of

“While Nevada operations had better development advance rates, the operating metrics, including cost, grade and negative cash flow, were unacceptable.” Phillips S. Baker Jr., Hecla Mining Co. president and chief executive officer,

the year, while changes in the carbon circuit at the Midas mill are expected to improve recoveries. In its highlights, Hecla stated that the silver cash cost, after by-product credits, was $2.26 per ounce, and all-sustaining costs, after by-product credits, averaged $9.33 per silver ounce in the first quarter. The average realized silver price in the 2019 quarter was $15.70 per ounce, 7 percent down from the $16.84 price per ounce in the 2018 quarter. Hecla produced 2.92 million ounces of silver in the quarter, higher than the 2.53 million ounces in the 2018 quarter. The company produced 60,021 ounces of gold in the quarter, up from 57,808 ounces in the first quarter of last year.

Alio Gold‌

Alio Gold Inc., which operates the Florida Canyon Mine in Nevada, reported net earnings of $1.6 million, or 2 cents per share, in the first quarter, down from $3.23 million, or 7 cents per share, in the 2018 quarter. “The first quarter came in slightly lower than expected as a result of severe winter weather conditions at Florida Canyon and low equipment

availability,” said Mark Backe n s, p re s i d e n t a n d c h i e f executive officer of Vancouver-based Alio. “With an aged fleet, we are reviewing the most cost-effective way to increase the availability at site. Our focus at Florida Canyon is on increasing productivity and lowering our costs across a number of areas where we see potential to make significant improvements, including the mining efficiency, mine planning and increased ore in process,” he said in the earnings report. Alio sold 23,986 ounces of gold in the quarter, up from 17,449 ounces in the 2018 quarter companywide, and sold 14,404 ounces of silver, up from 5,826 ounces last year. The Florida Canyon Mine produced 12,263 gold ounces and 8,648 silver ounces in the first quarter of 2019. Gold production at Florida Canyon decreased as a result of the winter weather conditions in February and low overall equipment availability resulting in lower crusher production, according to the company. Work continues to evaluate numerous opportunities to increase production and reduce costs from historic levels at Florida Canyon, Alio stated. Areas of primary focus are improving mining and mine fleet efficiency, improved mine planning functions expected to result in more efficient mining practices and grade optimization, exploitation of low strip ratio ore, increased ore in process by improved efficiency in crushing, and possible inclusion of run-of-mine ore to the heap leach pad. Subsequent to the first q u a r te r, A l i o s ta te d t h a t the Mine Safety and Health Administration completed a routine inspection at the Florida Canyon Mine. As a result

of the inspection, a portion of the mining fleet was taken out of service to address deficiencies with respect to fluid leaks present on the equipment. The company said it voluntarily removed much of the fleet from service to address similar issues and ensure a safe operating standard on all equipment, but mine production continues to be negatively affected as a result of the mechanical downtime. Crushing activity has been negatively affected, resulting in a reduction of ore processed at Florida Canyon, according to Alio. Alio said it is also looking at recommendations to bring the adjacent Standard Mine into production as well as to further investigate the known sulfide deposit beneath the oxide resource through a potential strategic partnership. Alio also operates the San Francisco Mine in Mexico but has stopped active mining there. The mine produced 10,968 gold ounces and 6,274 silver ounces in the first quarter, compared to 17,624 gold ounces and 8,997 silver ounces during the 2018 quarter. Gold and silver production slipped as a result of the cessation of open pit mining activity and low-grade stockpile material being processed through the crushing circuit, according to the earnings report. This January, the company decided to stop active mining in the San Francisco pit and focus on processing the lowgrade stockpile as a result of the San Francisco open pit not meeting planned ore production rates at an acceptable strip ratio in the upper levels of the planned pit laybacks. The company stated that it investigated mine planning options to potentially restart active mining. However, while the options were economical,

ELKO DAILY FREE PRESS, Elko, Nevada • 87

the company does not have the ability to fund the capital required for the various options. Alio said that as a result, the decision is to continue leaching and processing low grade ore from the stockpiles until the end of the year, at which time the stockpiles are expected to be depleted. Following the depletion of the stockpiles the operation will go into residual leach.

McEwen Mining‌

McEwen M ining Inc. reported its first-quarter results for the period ended March 31, showing a net loss of $10.1 million, or 3 cents per share, as the company advanced toward gold

production at the Gold Bar Mine in Eureka County. The company had a net loss of $5.2 million, or 2 cents per share, in the 2018 quarter. Production during the quarter was 36,315 gold equivalent ounces, down from 44,344 ounces in the 2018 quarter. Gold Bar poured its first gold ingot on Feb. 16 and posted a pre-production total of 2,030 gold equivalent ounces. McEwen Mining expects to produce 50,000 gold equivalent ounces at Gold Bar this year. This is a revised figure from 55,000 ounces because of a slower than expected s ta r t - u p, a cco rd i n g to the company. The Toronto-based company stated that the operational challenges experienced in the first two months of the quarter have largely been resolved, including making progress implementing better

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mining practices at the Black Fox Mine in Canada and reaching commercial production at the Gold Bar mine. Nevertheless, McEwen Mining reported the temporary production delays at Black Fox and a slower start-up at Gold Bar did lower revenue in the first quarter. McEwen Mining also owns the El Gallo Mine in Mexico and a 49 percent share in the San Jose Mine in Argentina, operated by Minera Santa Cruz S.A. McEwen M ining also announced in May that the company has a new chief financial officer, Meri Verli, and new general manager for Nevada, Jack Henris. Verli most recently was at PPX Mining Corp. and earlier was with Kirkland Lake Gold and Lake Shore Gold. Henris most recently was vice president of mining and

geotechnical for Goldcorp, and he earlier worked for Newmont Goldcorp and Barrick Gold Corp.

Comstock Mining‌

Comstock Mining, based in Virginia City, reported a net loss of $1.8 million, or 2 cents per share, in the first quarter of this year, compared with a net loss of $2.5 million, or 5 cents per share, in the first quarter of 2018. The company’s highlights for the quarter include signing a definitive agreement for the sale of Comstock’s Lucerne properties of roughly 1,200 acres to Tonogold for $23 million, including $11.5 million in cash, $3.5 million in stock and $8 million in assumed liabilities. Co m s to c k a l so g ra n te d Tonogold an option to lease See Reports, 89

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the American Flat processing facility upon the closing of the Lucerne deal. In addition, Comstock executed agreements to sell its Silver Springs non-mining assets for $9.75 million and began realignment of the company’s organizational structure for optimizing future growth. Corrado De Gasperis, executive chairman and chief executive officer of Comstrock said in the earnings report that “our year-over-year costs are down, primarily from net reductions in our environmental and administrative expenses. The Tonogold agreement ensures further reduced operating and interest expense reductions of approximately $2 million per annum, effective June 1, 2019.” Constock also reported that Tonogold is in advanced stage negotiations with a third party over securing additional significant claims in Storey and Lyon County, and with Comstock’s concurrence and support, that enhances the scope and potential of the Lucerne project. The deal is conditioned upon: (a) closing the sale of the Lucerne properties; (b) Tonogold assigning certain Lyon County patented and unpatented mining claims to the company for no additional consideration; © the new Storey County claims to be acquired by Tonogold being subject to the royalty agreement with Comstock and (d) Tonogold assigning any royalty interests owned on the company’s existing Dayton property patented and unpatented claims package to the company. “Tonogold has made cons i s te n t p ro g re s s to wa rd acquiring the Lucerne mine

“Tonogold has made consistent progress toward acquiring the Lucerne mine and has worked effectively to secure sufficient strategic investment capital for closing this transaction and funding Lucerne development.” Corrado De Gasperis, executive chairman and chief executive officer of Comstrock

and has worked effectively to secure sufficient strategic investment capital for closing this transaction and funding Lucerne development,” De Gasperis said. Comstock also reported it plans to advance the Dayton Project to full feasibility assessment, with a production ready mine plan within two years of commencing that work. This work has not yet started, but with the completion of the Lucerne transaction, the company should have the capacity and wherewithal for advancing the plan, Comstock stated. The company also plans continuing its exploration activities southward into Spring Valley with incremental exploration programs that include exploration and definition drilling of targets identified by geophysical surveys, surface mapping, prior drilling and deeper geological interpretations that will all lead to publishing an updated mineral resource estimate for the Dayton Project and the expanded exploration opportunities in Spring Valley during 2019. The company also is collaborating on community development planning activities in Silver City associated with Dayton Mine planning, and expects to begin local permit activities in 2019 for the Dayton Project following those planning activities.

90 • MINING QUARTERLY • SUMMER 2019

FEATURE

MINING

GEAR

Photo contest winners TIM BURMEISTER tburmeister@elkodaily.com‌

‌Lots of great “mining gear” photos were submitted for this quarter’s contest. Most depict machine gears – and a few show mining clothing. Thanks to the entrants, and congratulations to the winners!

Fall 2019 Photo Contest

THEME: With the Nevada mining giants coming together in a joint venture, this quarter’s theme is: “Working together.” SUBMISSION DEADLINE: August 13 Send entries to mining@ elkodaily.com

An aerial tramway tower in Potosí, Bolivia on Cerro Rico de Potosí, Bolivia. John BazDresch submitted this photo, and said this area was previously one of the richest silver deposits in the world, providing much of the wealth of the Spanish Empire.

A Wellman Seaver Morgan hoist at the Peregrina Mine in Guanajuato, Mexico. John Baz-Dresch submitted this photo, and said, “The hoist is powered by a 600(?)-HP motor and is used for hoisting the skips. Note the all-riveted construction and that the hoist foundation is tiled.”

ELKO DAILY FREE PRESS, Elko, Nevada â&#x20AC;˘ 91

Mining gear is just hanging out in the Exodus dry in this photo by Blake Burden.

This photo of the Empire Mine stamp mill is by Randy Squires. Installing the first sheave wheel at the Pinos Altos Mine, Chihuahua, Mexico. Photo by John Baz-Dresch.

3D CONCRETE, INC ........................................11

ELKO CONVENTION & VISITORS AUTHORITY...89

5TH GEAR POWERSPORTS .............................13

ELKO TOOL AND FASTENER...........................28

A PLUS TOTAL CARE.......................................16

EM STRATEGIES .............................................38

ALTERNATIVE MAINTENANCE SOLUTIONS, INC....PAGE 18 & 19

ELKO WIRE ROPE & MINING SUPPLY.............95

AMERICAN STAFFING, INC ............................24

FIRST DRILLING GROUP................................32

AMES CONSTRUCTION ...................................21 ARNOLD MACHINERY ....................................23 ASGCO MANUFACTURING .............................75 BOSS TANKS....................................................39 BRIDGESTONE AMERICA ...............................22

FORD STEEL...................................................44 FORDIA USA ...................................................32 GALLAGHER FORD ........................................33 GOLDER ASSOCIATES.....................................33 GRANITE CONSTRUCTION .............................45

BROADBENT & ASSOCIATES ...........................29 BULLARD INDUSTRIAL HEALTH & SAFETY ..... 24 CARLIN TREND ..............................................60 CASHMAN EQUIPMENT....................................7 CASHMAN EQUIPMENT..................................43 CEMENTATION USA INC .................................29

GRAYMONT ....................................................48 GREAT BASIN INDUSTRIAL............................48 GREATER NV CREDIT UNION ........................31 HANLON ENGINEERING ................................49 HARD ROK EQUIPMENT ................................50

CITY OF WELLS ..............................................22

HIGH MARK CONSTRUCTION .................. 53

COACH USA/ELKO INC....................................96

HOME 2 SUITES ........................................ 11

COMPRESSOR PUMP & SERVICE, INC.............56

HUNT & SONS INC.........................................37

DUFF NORTON AIR MOTOR JACKS.................35

I & E ELECTRIC INC ........................................49

EDWARD JONES ..............................................27

IDS NORTH AMERICA .....................................54

INTERSTATE MAG ......................................... 6

RABBITBRUSH RUN APARTMENTS.............. 30

J.S. REDPATH CORP ..................................... 14

RAM ENTERPRISE INC ................................ 74

JENNMAR CORPORATION ........................... 57

RAPID TRANSPORT, LLC ............................. 60

JENTECH DRILLING SUPPLY....................... 51

RED LION .................................................... 26

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

REDI SERVICES LLC..................................... 76

LANDER COUNTY ....................................... 58

REMA TIP TOP.............................................. 26

LEAVITT ASSOCIATES .................................. 60

RENO FORKLIFT ......................................... 77

LEDCOR....................................................... 59 LEGARZA EXPLORATION............................ 61 LIEBHERR USA............................................ 25 MARK BASSETT........................................... 63 MACLEAN ENGINEERING ........................... 12 NA DEGERSTROM ....................................... 67 NEWFIELDS................................................... 9 NEWMONT GOLDCORP ............................... 65 NORTHERN NEVADA EQUIPMENT.............. 70 NPK MINING EQUIPMENT .......................... 68 OCEANA GOLD HAILE OPERATION............. 63 OPEN LOOP ENERGY INC............................ 10

ROCKMORE INTL. ....................................... 79 ROCKY MOUNTAIN AIR & LUBRICATION .... 81 S&G ELECTRIC MOTOR REPAIR .................. 84 SACRISON ENGINEERING ........................... 87 SAS GLOBAL MINING CORP. ........................ 83 SILVER STATE ANALYTICAL LABS ............... 80 SMALL MINE DEVELOPMENT..................... 17 SNYDER MECHANICAL ............................... 85 SRK CONSULTING ....................................... 77 STATE FARM INSURANCE............................ 80 STANTEC CONSULTING SERVICE ................ 84

ORMAZA CONSTRUCTION ........FRONT PAGE BANNER 55

THYSSEN MINING INC................................. 47

PILOT THOMAS............................................ 71

TONATEC EXPLORATION............................ 15

PLUMBLINE................................................. 69

VT CONSTRUCTION ..................................... 87

POLELINE CONTRACTORS .......................... 66

WELDCO-BEALES MANUFACTURING ......... 87

PRAY & COMPANY ....................................... 72

WESTERN INDUSTRIAL PARTS INC............... 6

PURCELLâ&#x20AC;&#x2122;S WESTERN STATE TIRE .............. 72

ZGA ARCHITECTS & PLANNERS .................. 80

Q & D CONSTRUCTION................................. 73

IN AND AROUND ELKO...............................40 & 41

94 • MINING QUARTERLY • SUMMER 2019

SAFETY

MSHA investigating Gold Bar fatality Reports released on 2018 fatalities TIM BURMEISTER Mining Quarterly editor‌

‌Nevada saw its first mining fatality of 2019 on May 13. Haul truck driver Dean V. Pilcher of Colorado was killed when his vehicle overturned while operating at the Gold Bar Mine, McEwen Mining Inc. confirmed. “There were no other injuries associated with the accident,” the company stated. Pilcher was employed by N.A. Degerstrom, which is under contract with McEwen. Nationwide, this is the seventh fatality of 2019 that the Mine Safety & Health Administration is investigating. Gold Bar is a new mine south of Elko. McEwen Mining began construction of the Gold Bar Project on the Cortez Trend in Nov. 2017. The first gold ingot was poured at the mine on Feb. 16, 2019. In 2018, there were two mining fatalities in Nevada, both in the Elko area. MSHA released their final reports on these 2018 fatalities in the spring of 2019.

Lee Smith Mine

MSHA released its final report March 25 on the Oct. 25, 2018 fatality at the Lee Smith Mine about 50 miles north of Elko. The mine, which is operated by Small Mine Development, was issued a citation by the agency. “The accident occurred because mine management policies, procedures and controls were inadequate to ensure the establishment and maintenance of safe ground conditions where persons work or travel,” the report said.

Haul trucks stand at the ready on McEwen Mining Inc.’s Gold Bar Project property near Eureka in this December 2017 photo.

Idaho-based SMD operates the Lee Smith Mine for Jerritt Canyon Gold, a Toronto-based private company. SMD began production there in 2010, and Jerritt Canyon Gold purchased the Jerritt Canyon Complex in 2015. The MSHA report said Jason Holman, a 42-year-old powderman with eight years of experience, was fatally injured. Holman and Robert Pierce had nearly completed loading blastholes when Pierce received a radio call about a broken air line in need of repair. Holman continued loading blastholes while Pierce went to the cab of the powder truck to get tools to repair the air line. At 4:50 p.m. the cemented rock fill in the roof of the area collapsed. Pierce was thrown out of the cab of the truck by the force of the collapsing CRF. Keith Jones, general manager of Small Mine Development, said they estimated that about 67 tons of CRF fell. The cavity created in the ceiling was a domed area about 19 feet across with a maximum height of about seven feet. The MSHA report said that since the accident, “Mine

management has revised policies, procedures and controls for producing the CRF and provided training on the policies, procedures, and controls for the employees. Mine management is conducting follow-up testing of the backfill and load cells have been calibrated at the batch plant.” Following the accident, operations at the Lee Smith mine were halted and the miners were furloughed until December. The mine resumed operations in stages after that. Previously, there had been around 80 employees at the mine.

Pete Bajo mine

On April 2 MSHA released its final report on the Nov. 11, 2018 fatality at the Pete Bajo mine west of Elko. The report said Romney Natapu, a 45-year-old underground technician with more than eight years of experience, was fatally injured “when he exited the load-haul-dump he was operating without properly securing it. The LHD rolled forward and ran over him.” Pete Bajo is one of four underground mines in Newmont Mining Corp.’s operations on the

Carlin Trend. The MHSA report said that on the afternoon of the accident, Natapu drove an LHD into a section of the mine to start cleaning up a heading in preparation for drilling. A foreman later discovered Natapu beneath the left front tire. The report said investigators concluded that “Upon exiting the operator’s cab the victim did not follow company policies, procedures, and controls by: 1) lowering the bucket to the ground; 2) setting the parking brake; 3) turning the engine off; and 4) chocking the wheels or turning the LHD into the rib. The victim walked down the decline for an unknown reason and the LHD rolled forward, running over him.” “Investigators examined the steering and transmission joystick controls located on the front-left side of the operator’s seat,” the MSHA report said. “The controls were found to be defective, in that the transmission failed to automatically shift into neutral when the locking lever was engaged. However, this was determined to not be a factor in the accident, and a non-contributory citation was issued.” The LHD was a R1600G Caterpillar loader, which is about 33 feet long, over eight feet wide and weighs almost 66,000 pounds. The area where the accident occurred had an average grade of 6.5 percent, and declined toward the backfill face with an average grade of 12 percent, the report said. A citation was issued to the mine management for being in violation of the regulation for parking procedures for unattended equipment.

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