RESPEC Mining & Energy Quarterly Newsletter: January 2021

RESPEC Mining & Energy Quarterly Newsletter January 2021

knowledge is energy power: edition

Table of contents A MESSAGE FROM RESPEC

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NEWSROOM

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» Saving the World, One Hot Well at a Time

» Providing the Raw Materials for Alternative Energy

» Hydrogen and Energy Storage for the Future

» New Copper Mine in Arizona Achieves Production

» Making Eva Creek Wind Farm Possible

GROWTH AND PEOPLE

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» Welcoming Andy TenBrink and Brian Lewis

PRESENTATIONS

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» RESPEC Introduces Mining & Energy Webinar Series » RESPEC’s Latest Presentation Slides

CALENDAR OF EVENTS

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January 2021 RESPEC M&E Newsletter

a message from RESPEC Wishing you a happy, healthy, and safe new year!

The past year has brought about many challenges to our industry and has forced us to adapt to different ways of working and communicating. However, new challenges create new opportunities. We at RESPEC have remained committed to delivering excellence to all of our clients around the globe, and we look forward to continuing pushing innovations in the industry throughout 2021.

In this newsletter, you’ll find several examples of how we’re working within the ever-growing alternative energy market. From geothermal projects in Canada to wind farms in Alaska, and in the development of solutions for advanced hydrogen and energy storage, our team is committed to providing integrated solutions that not only meet the needs of each project but also push innovation in the industry forward.

John Morgan

RESPEC Senior Vice President, Mining & Energy

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January 2021 RESPEC M&E Newsletter

Newsroom Saving the World, One Hot Well at a Time

Leading Geothermal Expertise in Prominent Canadian Energy Developments

Hydrogen and Energy Storage for the Future Evolving With the Energy Industry and Its Demand

making Eva Creek Wind Farm possible

Accessing Remote Alaskan Wilderness to Help Harness Energy

Providing the raw materials for alternative energy It Starts With Mining

New Copper Mine in Arizona Achieves Production Low-Cost and Environmentally Friendly Copper Extraction

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January 2021 RESPEC M&E Newsletter

Saving the World, One Hot Well at a Time Leading Geothermal Expertise in Prominent Canadian Energy Developments

The subsurface scientists and engineers at RESPEC have supported geothermal development projects around the world. Our experts engage in geothermal exploration and development for geothermal power, as well as direct-use resource evaluation, due diligence, project management, exploration, geophysics, geochemistry, reservoir engineering, and drilling.

As Canada has moved toward a renewable energy portfolio, geothermal power and heat have come to the forefront. RESPEC has become a leading geothermal expert and consultant in Canada by holding a prominent position on three of the six major geothermal development and research projects in the country. These historical projects are challenging on many levels, from science and engineering to

sociopolitical factors to regulatory and funding requirements. The Canadian government and private entities are investing millions of dollars to get geothermal power kicked off, and RESPEC has worked on projects with more than $70 million in combined grant funding.

We have sited a characterization well doublet and developed a well-testing plan. The reservoir models that will be needed for a bankable feasibility report, feasibility forecasting, and engineering design work are also being developed.

Clarke Lake

Qulliq Energy Corporation

British Columbia is seeking alternative energy solutions for electricity and heat, and geothermal resources will play a significant role in the province’s future renewable energy strategy. The depleted natural-gas reservoir Clarke Lake is being assessed by RESPEC as a potential site for the first geothermal power plant in British Columbia. The project is being developed under proponent the Fort Nelson First Nation, and RESPEC is teaming with Barkley Project Group Ltd. and Power Engineers.

A team headed by RESPEC performed the Phase I Nunavut geothermal feasibility study in 2018 for Qulliq Energy Corporation (QEC) as the first phase in identifying potential geothermal resources to offset the use of diesel for electricity and heat in isolated communities in the far northern territory of Nunavut. RESPEC was recently awarded Phase II and is managing all of the geothermal development for QEC. As a part of Phase II, RESPEC is leading a geothermal exploration program in the communities of Baker Lake, Resolute Bay, and Cambridge Bay that includes drilling an 800-meter-deep, temperature-gradient borehole in the Canadian Shield and designing a deep-drilling exploration program.

Three-Dimensional Geothermal Conceptual Model of the Clarke Lake Reservoir.

Spring Sampling Program Near Iqaluit, Nunavut.

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December 2020 RESPEC M&E Newsletter

Deep Earth Energy Production Corporation Conceptual Wellfield Design by RESPEC.

Deep Earth Energy Production Corporation RESPEC is performing the lead reservoir engineering role for the Deep Earth Energy Production Corporation (DEEP) geothermal development site in Saskatchewan, Canada.

DEEP is endeavoring to tap into the sedimentary heat to produce geothermal power from the hot brines in the Williston Basin basal sandstones in southern Saskatchewan. RESPEC completed a geothermal resource feasibility and mapping

study that included the temperature, thickness, depth, and permeability of the basal aquifers.

Under the direction of RESPEC and the expert DEEP team, the world’s first horizontally completed and mechanically stimulated geothermal well was drilled to a depth of 3,500 meters and a length of 2,000 meters.

RESPEC is supporting the well testing and analysis, numerical reservoir simulation, and wellfield design for the bankable feasibility study.

For detailed information, please contact RESPEC’s Matthew Minnick, PhD, Geothermal Program Manager Matthew.Minnick@respec.com

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January 2021 RESPEC M&E Newsletter

Hydrogen and Energy Storage for the Future Evolving With the Energy Industry and Its Demand

The global energy industry has undeniably experienced significant changes in the recent past and will continue to rapidly evolve based on a complex set of internal and external factors.

Conventional energy sources will remain a critical component of our global energy mixture, but alternative energy sources will progressively contribute to the world’s growing energy needs.

The increasing energy demand combined with an evolving energy-source portfolio puts significant pressure on industry to provide reliable and economical energy while addressing societal concerns. Energy storage has become crucial to alleviate this pressure and ensure a successful energy future.

Energy storage has long been an important element of the energy industry; however, recent factors have renewed interest in the benefits provided by energy storage, such as: » Addressing the fluctuating market pressure and disruptions, as recently emphasized by the COVID-19 pandemic. » Providing functional flexibility for conventional energy sources to bridge the gap between operational limitations and changing energy demands. » Integrating variable renewable energy (VRE) (e.g., wind and solar) as a reliable energy source. » Incorporating hydrogen as an additional component of our global energy portfolio.

VRE integration has been driving the need for new uses of energy storage to address challenges in bringing these technologies into

Coupled Thermo-Hydro-Mechanical Modeling Results From a Computer Simulation of a Proposed Energy Storage Cavern Design.

the fold. Because the energy produced by wind and solar sources cannot be easily controlled, VREs often produce excess energy when the wind is blowing and the sun is shining but fail to meet energy demands when the wind is calm and conditions are cloudy. To smooth out these fluctuations, energy storage can be used to capture energy when production exceeds demand and release that energy when production does not meet demands. Although several storage technologies exist, the need for long-term, bulk storage has shifted the focus toward compressed-air energy storage (CAES) and hydrogen storage in the subsurface.

CAES involves using excess energy to compress and store air within specially engineered subsurface structures (e.g., salt caverns or mined excavations). When energy demand exceeds production, the compressed air can be withdrawn and converted back into electrical energy. Recent advancements in adiabatic technology have allowed CAES to be emissionsfree while efficiently providing hundreds of megawatts of energy for days.

RESPEC Provides Exploratory and Core-Drilling Services for Innovative Energy Storage Projects Around the Globe.

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December 2020 RESPEC M&E Newsletter

Hydrogen produced from water electrolysis (i.e., green hydrogen) or hydrocarbon feedstock (i.e., blue hydrogen) can fundamentally be viewed in the same way as conventional energy sources (e.g., natural gas) where the hydrogen can be transported, stored, and converted into useful thermal or electrical energy. The critical advantage of hydrogen is that water is the only byproduct when hydrogen is converted into useful energy; therefore, hydrogen is developing into a technology that bridges the gap between our existing, conventional energy industry and the need to meet energy supply and demand imbalances while considering social pressures.

At RESPEC, our storage solutions have typically focused on the subsurface bulk storage of liquid and gaseous hydrocarbons in salt caverns and mined caverns for the conventional energy industry; however, we have been evolving with the energy industry to build our experience with CAES and hydrogen storage in the subsurface.

Although our experience with CAES dates to our pioneering U.S. Department of Energy research in the 1970s, we are continuing to expand our experience by providing engineering services for CAES projects across three continents and hydrogen storage projects in the United States and Canada. These services include initial geologic screening and project siting, exploratory drilling and coring, laboratory testing and analysis, and geomechanical and thermodynamic studies of storage design. In concert with hydrogen production and storage, we are involved with CO2 sequestration projects in the United States and Canada and are leading U.S. Department of Energy research into innovative CO2 sequestration technologies. The results and guidance provided by these services have led to several CAES and hydrogen storage projects that are advancing toward construction.

As the energy industry continues to change and evolve, RESPEC’s engineers and scientists will be at the forefront to ensure that energy storage is positioned for the future.

For detailed information, please contact RESPEC’s Samuel Voegeli, Staff Consultant Samuel.Voegeli@respec.com

RESPEC Has Performed Laboratory Rock-Mechanics Testing That Is Specially Tailored to the Unique Demands of CAES Operations. The photo above shows a laboratory test setup for measuring the dilation strength of rock core from a well that will be used for subsurface storage.

Underground Storage Facilities Assessed by RESPEC

60+ 15+ 5+

gulf coast More than 60 cavern facilities assessed in Texas, Louisiana, Mississippi, Alabama, and Veracruz, Mexico.

permian More than 15 cavern facilities assessed in Kansas, Oklahoma, Texas, and New Mexico.

Basin and Range More than 5 cavern facilities assessed in Arizona, Utah, Colorado, and Wyoming.

20+ 10+ 3

Elk point More than 20 cavern facilities assessed in Alberta and Saskatchewan.

Appalachian, Michigan, and Maritimes More than 10 cavern facilities assessed in Ontario, Nova Scotia, Michigan, Ohio, New York, and Virginia.

european Three cavern facilities assessed in the United Kingdom and The Netherlands.

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January 2021 RESPEC M&E Newsletter

making Eva Creek Wind Farm possible Accessing Remote Alaskan Wilderness to Help Harness Energy

In November 2012, Golden Valley Electric Association (GVEA) began generating power at a new, 24.6 megawatt (MW) wind farm near the small community of Ferry, Alaska, 15 miles north of Healy. This major accomplishment to address the energy needs of Interior Alaska was made possible in part by the RESPEC-designed road to Eva Creek.

As of July 2011, access to this remote area of the Alaskan wilderness was via a single-lane mining road best traversed by an all-terrain vehicle (ATV), four-wheel-drive pickup truck, or helicopter. Just 2 months later, construction began to turn the rugged, 10-mile road into an access corridor capable of handling 380,000-pound loads; 150-foot-long wind-turbine blades; and all of the construction traffic to build 12 large wind-turbine generators. The 10 miles of access road and 6 miles of ridge-top road provided the necessary

access to the turbine sites and were designed to minimize ongoing maintenance (snow drifting) of the route and impacts to the surrounding fragile, alpine environment.

As a design consultant to Michels (a leading wind energy contractor), RESPEC provided the civil design and land surveying services for the access roads; civil and structural design for the turbine foundations; and full engineering services (civil, structural, mechanical, and electrical) for the operations and maintenance and garage/‌warmstorage buildings.

For detailed information, please contact RESPEC’s Keith Hanneman, Transportation Lead Keith.Hanneman@respec.com

RESPEC designed the following elements of this project: » Improvements to the railroad-siding loading area at Ferry, Alaska » Upgrades to approximately 10 miles of Ferry Road/trail » Approximately 6 miles of new roadway from the end of existing roads to the turbine sites at Eva Creek Wind Farm » Foundations and gravel pads for the 12 wind turbines » Construction camp » Material sites and a concrete batch plant » Temporary laydown yards » Operations and maintenance building at Eva Creek » Garage/warm-storage building near the railroad siding at Ferry.

Top to Bottom: Construction in Progress, Hauling in the Wind Turbines, View From the Top, and an Eva Creek Aerial.

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January 2021 RESPEC M&E Newsletter

Providing the raw materials for alternative energy It Starts With Mining

RESPEC is a key provider of technical expertise to multiple companies working to supply the required raw materials for alternative energy.

The future of alternative energy hinges on the development and mass production of reliable and economical energy storage solutions. The cost and power density of lithium-ion batteries, which typically use some combination of lithium, nickel, manganese, and cobalt, has reached the point that electric vehicles and variable renewable energy installations (VRE) (e.g., wind and solar) are attractive alternatives to fossil fuels. Adding cobalt to lithium-ion batteries improves both the power

Drill Rig at the Iron Creek Project Near Salmon, Idaho.

density and life span of the battery. Most cobalt is currently sourced from the Democratic Republic of the Congo using mining methods that have raised numerous environmental and humanitarian concerns. To avoid these challenges and stabilize their supply lines, battery producers have begun seeking alternative cobalt sources with high social and environmental standards. One project that meets this need is the Iron Creek cobalt-copper project near Salmon, Idaho, owned by First Cobalt. RESPEC’s Mine Development Associates division recently completed an updated mineral resource estimate that shows the project could possibly contain over 24 million pounds of cobalt (12.3 million pounds Indicated and 12.7 million pounds Inferred), as well as considerable amounts of copper. That amount of cobalt is enough for millions of batteries for electric vehicles or VRE installations. Exploration that could expand the resource is ongoing at the Iron Creek property, including a geophysics survey announced in

October 2020 and additional drilling planned for 2021. First Cobalt also has a cobalt refinery in eastern Ontario that it plans to have operational as early as 2021, ensuring a 100% North American based cobalt source for battery manufacturers.

Another element critical to the development of alternative energy is vanadium. While vanadium is best known as an additive to steel to improve its strength, another developing use for vanadium is redox flow batteries, which use vanadium in multiple oxidation states to store electricity. Vanadium batteries have several stability and safety advantages over lithium-ion batteries, which makes them ideal for stationary energy storage to support electrical grids or VRE installations. Victory Metals is currently developing a vanadium project called the Iron Point project near Winnemucca, Nevada, with technical advice from Mine Development Associates, a division of RESPEC, including exploration target recommendations and guidance on initiating a mineral resource estimation.

The development of alternative energy sources will lead to a boom in the mining of numerous commodities at scales not currently supported by known resources. RESPEC has the technical ability and commitment to innovation to see new projects through from resource to production and will continue to be a leading contributor to the growth of alternative energy.

For detailed information, please contact RESPEC’s Derick Unger, Geologist Derick.Unger@respec.com Oblique View Looking South of the Iron Creek Cobalt-Copper Project. Areas with greater than 0.18% cobalt equivalent shown in magenta, areas greater than 0.03% cobalt equivalent shown in gray.

January 2021 10 RESPEC M&E Newsletter

New Copper Mine in Arizona Achieves Production

Low-Cost and Environmentally Friendly Copper Extraction

Excelsior Mining Corp. announced on December 21, 2020, that its first copper cathode production has been achieved at the Gunnison Copper project in Arizona. This low-cost and environmentally friendly, in situ recovery (ISR) copper-extraction project is permitted to 125 million pounds per year of copper cathode production. The feasibility study projected an after-tax net present value of USD$807 million and an internal rate of return of 40 percent using a USD$2.75 per pound copper price and a 7.5 percent discount rate.

The Gunnison Copper project is unique and cutting edge because of its ISR mining method.

In this noninvasive method, boreholes or delivery wells are drilled into an orebody through which a dilute solution is pumped to dissolve the targeted minerals or metals. The solution moves through the rock in a controlled manner to nearby recovery wells, where the solution is pumped back to the surface for processing. Differential pumping rates or natural impermeable barriers are used to control the movement of the solution through the rock.

Combined with wellfield design, this technique prevents solution from exiting the mine area. The pumping action of the recovery wells ensures that all of the pregnant solution is collected from the delivery well. In ISR mining of copper-oxide ores, the dissolving solution is usually weak sulfuric acid, which is the same acid used in open-pit and dump or heap-leach operations around the world. The boreholes or wells effectively become the mine access and the leach pad is left underground.

Processing is generally done by chemical precipitation or solvent extraction/‌electrowinning

Excelsior Team With First Copper Cathode.

(SX-EW). Gunnison is the first copper mine in the world to use ISR as a stand-alone mining method.

Mine Development Associates, Inc. (MDA), a division of RESPEC, has been involved in the Gunnison Copper project since 2014 by generating mineral resource and reserve estimates at various stages of the project development and working with the Gunnison team to quantify and model meaningful geological variables for the Copper From the Electrowinning Plant. operation. Our contributions have included the published resource and reserve estimates used for Gunnison’s 2016 prefeasibility study and For detailed information, 2017 feasibility study. RESPEC looks forward to the please contact RESPEC’s continued success of Excelsior Mining Corp. and Jeff Bickel, Geologist the use of ISR as a sustainable commercial-scale Jeff.Bickel@respec.com mining method for copper.

January 2021 11 RESPEC M&E Newsletter

Growth and People Welcoming Andy TenBrink and Brian Lewis Mining & Energy Team Grows in Reno and Lexington

January 2021 12 RESPEC M&E Newsletter

Welcoming Andy TenBrink and Brian Lewis Mining & Energy Team Grows in Reno and Lexington

Andy TenBrink Mine Development Associates (MDA), a division of RESPEC Company, LLC, is pleased to announce the addition of Andy TenBrink to the outstanding geology and engineering group at our office in Reno, Nevada.

We welcome Andy, who is returning to MDA after spending time at EP Minerals, a U.S. Silica Company and the U.S. Bureau of Land Management (BLM). During his 3 years at EP Minerals, Andy held the positions of mining engineer, mines manager, and mine planning manager while providing oversight to nine active mining operations, including diatomaceous earth, specialty clays, and sand deposits. His primary project work involved creating, updating, and optimizing phased mining and reclamation plans; resource and production planning; writing and updating plans of operation and reclamation cost estimates; and coordinating permitting, land-use planning, and aerial surveying of companywide assets.

permitting, and contract preparation and administration. These projects regularly involved technical functions, such as quarry design, road design and layout, drainage design, construction supervision, road inspection, and road reclamation.

Andy was previously a project geologist at MDA and worked with two- and three-dimensional, geologic-section interpretation; solids modeling; database management; exploration mapping; pit design; geological logging; and drill program planning and management. He also provided GEOVIA Surpac™ training and technical support for North American clients.

At RESPEC, Andy will be responsible for managing GeoSequel® sales and services; expanding RESPEC’s geologic-resource modeling, resource estimation, and mine planning capabilities; and multiple aspects of project development.

Welcome back, Andy!

While at the BLM, Andy was active in civil engineering technical work, including project planning and feasibility, right-of-way and road-use

Brian Lewis RESPEC is excited to welcome Paul (Brian) Lewis, a senior drilland-blast specialist, to our office in Lexington, Kentucky. Brian will be a part of our explosives and engineering group for blast consulting and business development.

Brian has 29 years of experience in the drill-and-blast industry. He spent 20 years running a drill-and-blast contracting company that primarily focused on construction along with some quarry and coal blasting. Brian has designed and installed several rock/soil anchors and slope-stabilization efforts. He earned a bachelor of science degree in business administration

from the University of Louisville and is currently pursuing his master of science degree in explosives technology from Missouri University of Science and Technology. He has worked on site throughout Kentucky, Indiana, Ohio, and Tennessee, and has personally conducted many blasting projects from the initial sales and marketing through the design, planning, and execution.

Brian recently worked on the I-69 Section 5 project in Bloomington, Indiana, and the civic center expansion project in downtown Lexington, Kentucky. He serves as president of the Kentucky Bluegrass Chapter of the International Society of Explosives Engineers and is an active board member of the Kentucky Blasting Conference.

Welcome, Brian!

January 2021 13 RESPEC M&E Newsletter

Presentations RESPEC Introduces Mining & Energy Webinar Series Kicks Off With Blasting in Close-Quarter Environments

RESPEC’s latest Presentation slides

View All RESPEC Presentations on RESPEC.com

January 2021 14 RESPEC M&E Newsletter

RESPEC introduces Mining & energy webinar series Kicks Off With Blasting in Close-Quarter Environments

In November, RESPEC kicked off a new mining webinar series with Blasting in Close-Quarter Environments: From Quarry to Construction Projects, hosted by Brian Lewis and Daykin Schnell. Brian and Daykin have a combined 35 years of blasting-related experience and have worked on various blasting projects in the mining and civil industries.

The webinar can be viewed on the RESPEC website (linked below) and includes thoughts on the importance of protecting the area that surrounds a blast, specifically nearby people, structures, and roadways. This webinar also focused on using instrumentation, tools, and strategies to design and optimize blasts in close-quarter environments, from quarries to construction blasting projects. The main takeaways from this webinar are: » General rules of thumb for blast design. » Introduction to innovative equipment used for blast optimization. » Introduction to blast design software and its use in blast optimization. » Proper seismograph implementation. » The importance of regression analysis and how to interpret results. » What to look for in the post-blast review.

The second webinar, Getting Ready for a Mineral Resource Estimate, will be held on Wednesday, January 27, 2021, at 1 p.m. (EST)/10 a.m. (PST). For more information and to register to attend, click here.

Access the recording of our first webinar on our website:

register for our next webinar:

January 2021 15 RESPEC M&E Newsletter

RESPEC’s latest Presentation slides View All RESPEC Presentations on RESPEC.com

CONSTRUCTION BLASTING IN CLOSE QUARTERS Presented by Brian Lewis

Photos and Videos by Ralph King and Bedrock Contracting

Construction Blasting in Close Quarters Presented by Brian Lewis, Senior Drill-and-Blast Specialist Kentucky Blasting Conference, December 2020 Brian.Lewis@respec.com

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Calendar of events As a result of continued uncertainty along with state, local, and health agency directives regarding COVID-19, in-person conference attendance is limited for RESPEC employees in 2021. We urge you to connect with us by email and telephone, our website, and our social media channels. We wish you all good health and safety and look forward to meeting you at these conferences when they are rescheduled.

March

Thank You

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March

SME Annual Conference & Expo Virtual

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May

PDAC Convention Virtual

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Join us at our virtual booths at each of these conferences to: » Connect (or reconnect) with our experts » Learn more about how our growth benefits clients like you » Read up on how RESPEC has responded to the evolving marketplace and demand » View our brochures, videos, and more.

CIM Convention & Expo Virtual

Stay connected with RESPEC digitally through our social media accounts or contact Tabetha Stirrett Tabetha.Stirrett@respec.com

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