Skillings Mining Review February 2022

2022 FEBRUARY IN REVIEW

111/02

10

THE BEST COPPER STOCKS: POTENTIAL IN 2022 42

The State of Precious Metals

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THE LEAD

10 The Best Copper Stocks potential in 2022

MINING INSIDER

05 Tesla Supply Deal Leads to Talon Stocks Experiencing a Peak

23 Bam Bam BOD: Now Accomplished With a Professional Geologist

29 ALLETE Senior VP and CFO Robert Adams announces retirement plans

tion Solutions for Mining Giants Behind the Revenue Gains

42 The State of Precious Metals STATISTICS

46 November 2021 crude steel production

47 crude steel production December 2020

SURFACE MINING

08 Australian Mining Companies Try

to Scrap Old Equipment

16 Billion-Dollar Lithium Drilling Project Aims U.S. to Energy Independence

24 Surge Battery Metals: Northern Nevada: First Outcomes of the Lithium Exploration Programs

UNDERGROUND MINING

28 Greatland Gold Gives Out Proceedings of the Juri JV final Exploration

PROFILES IN MINING

30 Interview with Mr. Marc Mesa Capodicasa.

Founder & CEO, Eco – Soil Group

SPECIAL FOCUS

18 Philippines Mining Industry Reviving After the Shock

38 Underground Mining Market To Go Upto US$ 25 Bn By 2031: Comprehensive Inspecwww.skillings.net | 3

PUBLISHER

2022 FEBRUARY VOL.111.

NO.02

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Tesla Supply Deal Leads to Talon Stocks Experiencing a Peak

F

ollowing earlier news that Talon Metals (TSX: TLO) had inked a nickel supply agreement with Tesla, shares of Talon Metals (TSX: TLO) opened up roughly 41.7 percent (in mid-January), trading around a 52-week high.

Tesla has agreed to buy 75,000 tonnes of nickel in concentrate over the next six years as part of the deal. The Tamarack nickel project in Aitkin County, Minnesota, which Talon and Rio Tinto jointly

hold, is expected to yield some metals.

Talon owns a 51 percent stake in the Tamarack project, which consists of a significant land position (18 kilometers of strike length) with multiple high-grade intercepts outside of the present resource area. The goal is to build a responsible processing capability in the United States and expand this nickel resource.

The Tesla supply deal is contingent on Talon acquiring a further 9% stake in the Tamarack project (bringing its total stake

to 60%) and putting the project closer to commercial production.

Over and above the first 75,000-tonne commitment, Tesla has a privileged right to negotiate for the purchase of extra nickel concentrate.

By Tuesday's market close, Talon's stock had lost some of its gains, but it was still up 16.6% at C$0.70 a share. The nickel miner's market capitalization is estimated to be around C$418 million.

www.skillings.net | 5

UNDERGROUND MINING

Indian CM on New Policy to Export Iron Ore Dumps: Help Resume Mining Goa's chief minister, Pramod Sawant, stated

that an estimated 10 to 20 million metric tons of low-grade iron ore lay outside the mining leases and could maintain mining activities in the state for the next four to five years.

Goa's chief minister, Pramod Sawant

A

ccording to chief minister Pramod Sawant, the Goa cabinet approved a policy allowing mining corporations to export low-grade iron ore mined during the mining boom but dumped on public and private land since it was deemed of little value.

The cabinet decision, according to Sawant, will clear the way for the restart of mining operations, which has been halted since the Supreme Court declared Goa's mining license renewals unconstitutional and terminated them in 2018.

Goa has various mining dumps strewn over the countryside, essentially waste earth and rock covering a mineral deposit that was passed over by miners who were only interested in the higher-grade ore found down beneath the opencast pits in the past.

These dumps can be found in both public and private areas.

According to Sawant, an estimated 10 to 20 million metric tons of low-grade iron ore are sitting outside the mining leases, which may keep mining operations in Goa going for the next four to five years.

"The state government has formulated a plan for the regularization of mining dumps on public and private land, as well as other connected issues." "Those who were valid lessees and had paid the government the money (as a penalty for unlawfully dumping on government land) will be permitted to export," Sawant said.

The Goa government revised the Land Revenue Code in 2013 to make iron ore dumping outside of mines legal by paying the penalty. At the time, Rs. 200 crores had been collected.

6 | SKILLINGS MINING REVIEW February 2022

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LEAD

Australian Mining Companies Try to Scrap Old Equipment Australia's top mining firms are putting pressure on local suppliers to destroy old equipment and minimize the carbon footprint of their trucks to cut greenhouse gas emissions and waste.

In view of their own environmental, social, and governance accountability, Rio Tinto Group, BHP Group, and Fortescue Metals Group Ltd. are analyzing the carbon footprint of their suppliers' equipment.

M

iners have made headway in lowering their global share of emissions to 2.8 percent in 2020, down from 3.4 percent in 2016. Still, consumers and investors are putting a lot of pressure on them to reduce their carbon footprints and enhance their sustainability.

In an interview, Matthew Perry (Schlam Group's technical support manager) noted, "We've noticed an increase in demand for mining firms seeking to 'complete the

loop' on their assets as part of their supply agreements with companies like us."

Less junk, more scrap According to research firm Grand View Research, mining businesses spent US$119 billion on mining equipment in 2019, and that figure is anticipated to rise over the next decade.

When the equipment is no longer in use, it can be recycled because it is made of iron,

8 | SKILLINGS MINING REVIEW February 2022

steel, and rubber. For the past 25 years, companies have discarded some of their old equipment, while others have been allowed to rot on the job site.

"There are many old truck bodies lying on mine grounds in the Pilbara where it's uneconomic to do something with them," said David Singleton, CEO of Austin Engineering Ltd, an equipment provider. "And for that, we're looking at economic and engineering solutions."

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LEAD

The Best

Copper Stocks Potential in

10 | SKILLINGS MINING REVIEW February 2022

C

opper prices have risen by roughly 25% this year. The metal benefited from a revival in global industrial demand, confidence about economic development, demand in top consumer China, shortages from the best producers Chile and Peru, and Biden's infrastructure plan. Copper prices have fluctuated from $3.5035 per pound in February to $4.8840 per pound in May so far this year. It is now trading at roughly $4.42 per pound, with a yearly average of $4.24.

www.skillings.net | 11

LEAD

Copper prices are forecasted to remain high due to supply

restrictions, low stocks, and a solid long-term demand outlook fueled by the ongoing green energy revolution. Stocks, for example, BHP Group BHP, Freeport-McMoRan Inc. FCX, Southern Copper Corporation SCCO, and Teck Resources Limited TECK are well-positioned to benefit from this growing trend.

"Charging Ahead" with Copper Copper is a critical metal for the global economy, and it will be essential in achieving the global clean energy transition. As per the U.S. Geological Survey, copper is the world's third most consumed industrial metal.

(International Monetary Fund), the global economy would grow by 4.9 percent in 2022. Global growth is expected to slow after 2022, to around 3.3 percent in the medium term. Copper consumption is expected to rise, as metal is critical to economic activity.

Copper has long been considered a global economic bell, probably due to its wide spectrum usage. As per the IMF

Demand would be boosted by infrastructure development in key countries like China and India. Rising worldwide

12 | SKILLINGS MINING REVIEW February 2022

awareness of greener energy and electric vehicles will be a significant stimulus for copper demand in the long run. Electric motors, batteries, inverters, and wiring are all made of red metal used in EVs. While classic cars contain 18 to 49 pounds of copper, plug-in hybrid electric vehicles (PHEV) use 132 pounds, and battery electric vehicles (BEV) use 183 pounds, according to the International Copper Association ("ICA"). Copper-based technologies are used very widely in the EV charging infrastructure.

Clean energy technologies will account for about 45 percent of copper consumption in 2040, up from 24 percent in 2020, according to the International Energy Agency.

Global copper demand for charging infrastructure is estimated to reach 115,000 metric tons by 2025, according to Statista.

Copper production in Chile and Peru accounts for over 40% of global output.

The impact of the coronavirus epidemic had put a strain on supply from these countries.

The introduction of new virus strains could cause operations to be disrupted once more, affecting the copper supply. A recent tax and royalties measure in Chile, which the Senate has already approved, might jeopardize about 25% of the coun-

try's copper output if it is not amended.

The royalty rate shall be calculated from the output rather than profits under the proposed adjustment, and it could jump to 75% if copper prices hit $4 per pound.

Several corporations may cease operations in the country due to this, given they are already incurring enormous expenditures. Community protests against mining operations are becoming more common in Peru, the world's second-largest producer.

These developments may jeopardize copper production. Grade decline, growing input costs, water restrictions, and a

lack of high-quality future development options further limit the metal's supply.

Copper prices are likely to rise due to the demand-supply imbalance, which is good news for miners. Miners are increasingly focusing on cost-cutting techniques and digital innovation to improve operating efficiencies, which will help them increase profits over time.

Copper miners are part of the Zacks Mining - Non-Ferrous industry, which has grown 22.4 percent year to date vs.

6.3 percent for the more significant Basic Materials sector.

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LEAD

The introduction of new virus strains could cause operations to be disrupted once more, affecting the copper supply. A recent tax and royalties measure in Chile, which the Senate has already approved, might jeopardize about 25% of the country's copper output if it is not amended.

4 Copper Stocks to Watch We recommend keeping an eye on these copper mining stocks. Four such equities with a Zacks Rank #3 (Hold) and a VGM Score of A have been identified. According to a study, stocks with this combination provide the best investment potential.

BHP Group The company has significantly reduced its long-term debt level in recent years, aided by robust cash flow, which will contribute to growth. Efforts to improve operational efficiency through better technology adoption across the whole value chain will remain to serve the company, reduce costs, and gain margins.

BHP plans to merge its corporate structure into a single entity, which currently consists of two-parent companies.

This move will support its commodity-focused strategy (copper, nickel, and potash), which will enable it to capitalize on emerging global trends such as decarbonization, electrification, and rising living standards in developing countries, among others. The Spence Growth Option copper project was finished, and production (including cathodes) is planned to average 300,000 tons per year for the first four years.

BHP Group, based in Melbourne, Australia, is involved in oil and gas exploration, development, and production, as well as copper, silver, zinc, molybdenum, uranium, gold, iron ore, and metallurgical and energy coal mining. BHP's long-term earnings growth rate is expected to be 4%. The Zacks Consensus Estimate for fiscal 2022 earnings implies a 3 percent year-over-year increase.

14 | SKILLINGS MINING REVIEW February 2022

Freeport-McMoRan Freeport-McMoRan is conducting exploration around existing mines with the goal of expanding reserves.

Freeport-McMoRan will profit from an ongoing large-scale concentrator expansion project at Cerro Verde, which will add 600 million pounds of copper and 15 million pounds of molybdenum to annual production. Cerro Verde's expanding activities are aided by cost savings and large-scale, longterm reserves. It finished the Lone Star copper leach project and is expected to produce 200 million pounds of copper per year. The company's cost-cutting efforts and efforts to lower debt levels appear promising.

Mineral exploration and development, mining and milling of copper, gold, molybdenum, and silver, and smelting and refining of copper concentrates are all activities of this Phoenix, Arizona-based corporation. The Zacks Consensus Estimate for Freeport-earnings McMoRan's for fiscal 2022 shows a 23.7 percent increase year over year. Over the last couple of months, the estimates have been revised upward by 14%. The company's long-term earnings growth rate is expected to be 29 percent.

and Peru. Its unwavering commitment to increasing lowcost production is admirable. Because Peru is the world's second-largest copper producer and possesses 13% of the world's copper reserves, the company will benefit from its efforts to expand there. It's worth noting that Peru's national output is expected to increase to 225000 tons in 2022. Southern Copper has a $7.9 billion investment program in Peru.

Southern Copper Corporation Southern Copper Corporation owns the industry's largest copper reserves and manages high-quality, world-class assets in investment-grade countries, including Mexico

By developing its organic growth projects, the corporation retains its goal of producing 1.9 million tons by 2028.

This Phoenix, Arizona-based corporation mines, explores, smelts, and refines copper and other minerals. In the last few months, the Zacks Consensus Estimate for Southern Copper's earnings for 2022 has risen by 5%. SCCO's longterm earnings growth rate is anticipated to be 16.1 percent.

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SURFACE MINING

Billion-Dollar Lithium Drilling Project Aims U.S. to Energy Independence

Teck Resources The company has a strong pipeline of projects and a portfolio of world-class assets in stable jurisdictions. Despite the impact of COVID-19 in Chile, the flagship QB2 copper growth project reached the halfway point in the third quarter of 2021. In the second part of 2022, the first production is expected. QB2 will change the company's copper industry once it is completed, transforming it into a significant worldwide copper producer.

It has many other copper expansion projects in the works to accommodate future global copper demand. RACE21, the company's innovation-driven efficiency program, is still in the works, intending to increase productivity across the board and drive yearly EBITDA growth.

Based in Vancouver, Canada, Teck Resources is a mining and mineral development firm with business segments focused on steelmaking coal, copper, zinc, and energy. Over the last two months, approximately, the Zacks Consensus Estimate for the company's earnings in 2022 has increased by 21%. The long-term profits growth rate for TECK is predicted to be 37.8%.

16 | SKILLINGS MINING REVIEW February 2022

A billion-dollar lithium drilling project claims to

revitalize an impoverished region and help the US attain energy independence by mining lithium from an aquifer under the Salton Sea.

M

ore and more salt is being absorbed by Lake Tahoe, the state’s most extensive and most disturbed body of water.

It’s no longer a popular vacation spot since demolished once-thriving resorts. Created in 1905, when a levee was broken, the 15-mile-by-35-mile lake was the largest in the Imperial Valley. However, the lake is draining because farmers use less water and less irrigation runoff enters it. San Diego was also a customer of the valley’s water supply.

Open-pit mines, where dynamite is used to blast and crush rock, are required for the majority of the hard rock lithium mining in Australia and China. This lithium production technique is immaculate because the brine has already been brought to the surface. It’s already being used to power turbines and generate energy by removing steam. At the very

least, lithium has the potential to save the economy by creating tens of thousands of well-paying employment. There might be enough money to fix the lake’s issues if they occurred.

Seventy-five percent of it is water, and the other twenty-five percent is filth.

Solid sludge, to put it mildly. We must find an ecologically and economically feasible way to remove the lithium from the sludge without removing any of the other materials. Weisgall, Berkshire Hathaway Energy’s vice president for government affairs, said the company plans to begin commercial operations in the Salton Sea

It can be the biggest lithium production plant in the United States, if not the whole world. According to the Imperial Irrigation District, there are now ten geothermal plants and two more lithium extraction operations near the Salton Sea.

in 2026, with two demonstration units now in operation at the site.

According to projections, nearly a third of the world’s lithium demand might be met within two years. Lithium might become the “white gold” of the future as manufacturers convert to electric cars. Obtaining it in California could diminish or eliminate U.S. reliance on Chinese supply.

A heated depression known as the Salton Sink was inundated for two years in 1905, resulting in the lake’s formation.

It was a popular tourist attraction in the 1950s, attracting celebrities such as Frank Sinatra. Desert winds transport agricultural contaminants into the lake, located roughly 150 miles southeast of Los Angeles.

This billion-dollar drilling operation aims to revitalize an underprivileged area and assist the United States to achieve energy independence by finding lithium in the brine of an aquifer underneath the lake.

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SPECIAL FOCUS

Philippines Mining Industry Reviving After the Shock Last year, 2021, the Philippines country mining industry had a lot to be thrilled about.

For one thing, the industry's production value continued to rise, with double-digit growth in the first nine months. The value of the country's metallic mineral production increased by 22.34 percent from P99.03 billion in the same time the previous year, according to data from the Mines and Geosciences Bureau (MGB).

G

rowth in gold and nickel ore output pushed the Philippine mining industry's production value in the first three quarters of 2021, thanks in large part to generally favorable world metal prices."

Other metals, like say silver, copper, chromite, and iron ore, had lesser output, according to Rocky Dimaculangan, a

spokeswoman for the Chamber of Mines of the Philippines (COMP). He stated, "We believe the tendency maintained during the last quarter of the year."

COVID INITIATIVES AND EMPLOYMENT

in 2021, demonstrating that it can lie as a cornerstone in the country's post-pandemic comeback efforts by continuing to provide jobs, as well as tax and export earnings for the government," Dimaculangan added.

Despite the pandemic, mining businesses continued to employ their personnel.

"As in 2020, the industry went resilient

"The mining sector also provided significant help to COVID-19-affected host

18 | SKILLINGS MINING REVIEW February 2022

and surrounding mining towns in the form of medical supplies, food assistance, and other social amelioration activities," he stated.

COMP previously stated that its members were going to great lengths to keep their employees employed during the pandemic, implementing resilient measures that prioritized health and safety.

Its members, largely the country's largest metals mines, were among the first to respond to the epidemic, allowing them to efficiently manage infection risks within and around their mines.

Philex Mining Corp., for example, kept roughly 1,900 employees at its Padcal mine in Tuba, Benguet. The jobs were also preserved at the company's Mandaluyong headquarters, where roughly 80 people work. Aside from safeguarding jobs, mining companies have increased their efforts to promote worker health and safety.

Carmen Copper Corp.'s Trace, Test, and Treat policy is an example of this, in which the company's emergency responders and medical staff methodically traced contacts of those exposed to COVID-19 positive people and provided ongoing testing.

Berong Nickel Corp. likewise closely implemented health and safety regulations at its site. At the same time, Lepanto Consolidated Mining Co. provided workers with the appropriate personal protective equipment, including Vitamin C for frontline personnel, and conducted extensive testing for all mine site workers.

THE MORATORIUM ON NEW MINERAL DEALS HAS BEEN LIFTED

The easing of the prohibition on new mineral agreements was one of the major stories in the mining industry last year. www.skillings.net | 19

SPECIAL FOCUS

More measures, according to COMP, are needed to make the country's mining industry more appealing to investors.

"While we applaud the issuance of Executive Order 130, which lifted the moratorium on new mining permits, we look forward to more policy pronouncements, such as the lifting of the ban on open pit mining, that will help the Philippine mining industry realise its full potential and attract more foreign and domestic investment," Dimaculangan said.

"We also remain optimistic that future business and investment policies will be more solid. In terms of investment attractiveness and mining legislation, our country has a long way to go in comparison to other mining jurisdictions around the world," he remarked.

According to COMP Chairman Gerard Brimo, the Philippines is no longer on the radar of global mining investors, citing the findings of a Frasier Institute survey that omitted the country.

The lifting of the embargo on new mineral agreements, according to MGB director Wilfredo Moncano, will let the mining sector to raise its contribution to the country's economy.

President Duterte signed Executive Order 130 in April, revising Section 4 of EO 79, which was issued in 2012 during the Aquino administration and forbids the grant of mineral agreements until new legislation that rationalizes existing income sharing schemes and methods are in place.

The new EO authorizes the government to enter into new mining agreements, as long as the Philippine Mining Act of 1995 and associated laws, rules, and regulations are followed.

It authorizes the Department of Environment and Natural Resources (DENR) to continue to award and issue exploration permits in accordance with existing laws, rules, and standards.

The lifting of the embargo on new mineral agreements, according to MGB director Wilfredo Moncano, will let the mining sector to raise its contribution to the country's economy.

More policies are needed to help the industry reach its full potential.

20 | SKILLINGS MINING REVIEW February 2022

He claimed that, despite the country's mining industry's potential, the opportunity to grow it was squandered.

"The problem is that policies moved against the sector starting in 2012, when a presidential executive order put a ban on new mining permits in place because the industry wasn't paying enough taxes," he added.

According to Brimo, it took years for the ban to be lifted because President Duterte only issued EO 130 last year, which authorizes the government to enter into new mining agreements.

He claims that the restriction on openpit mining has impeded the industry's expansion. He said that open-pit mining is a technique utilized worldwide to obtain

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Philippines accounts for about a quarter of global mined supplies of the metal used in stainless steel © Bloomberg

near-surface resources that cannot be exploited using underground methods.

Moncano expressed optimism that the draught department administrative order (DAO) easing the restriction on open-pit mining would be signed before Duterte's term ends.

(Note: On Dec. 29, 2021, the DENR issued Department Administrative Order (DAO) 2021-40, effectively repealing the order published in 2017 by late environment secretary Regina L. Lopez, a known anti-mining advocate, which lifted the nationwide ban on open-pit mining for copper, gold, silver, and complex ores.)

Brimo mentioned the case of a multinational mining corporation that had to wait 2 years for its permission to be renewed

once again in the Philippines due to a dispute with a local government unit, in addition to anti-mining legislation.

ADVANCING THE CAUSE OF SUSTAINABILITY

ciation of Canada's Towards Sustainable Mining (TSM) project, a globally recognized sustainability program that assists mining businesses in managing significant environmental and social risks.

Mining companies in the country make it a point to establish sustainability initiatives, as their activities have been enormously disliked for their possible negative influence on their sites' environment and communities.

Dimaculangan stated the group had made progress by effectively aligning its "Filipinized" version of TSM with the Global Industry Standard in Tailings Management established by the UN Environment Programme's Global Tailings Review.

The industry's promise to construct bamboo plantations on over 4,000 hectares of land in the coming 3 years as part of the DENR's bamboo plantation program is one of their attempts to contribute to environmental conservation. COMP also continues to support the Mining Asso-

COMP has also adopted the Filipinized version of the TSM Climate Change Protocol and its associated guide as part of this alignment effort, increasing the total number of protocols that COMP's member companies will apply in the following years to eight," he stated.

22 | SKILLINGS MINING REVIEW February 2022

Bam Bam BOD: Now Accomplished With a Professional Geologist Vancouver, British Columbia, Bam Bam Resources Corp. announced that Larry Segerstrom, P.Eng., M.Sc. Geology, M.B.A. has agreed to become a member of the prestigious Board of Directors of the Company.

P

resident and CEO David Greenway stated, "Mr. Segerstrom, an experienced Professional Geologist with vast experience in the discovery and advancement of porphyry copper-gold prospects, has joined the Bam Bam Board of Directors. Larry will be an invaluable resource as the company moves forward with its Majuba Hill copper, silver, and gold project. Speaking for the Board, and myself, I would like to extend a warm welcome to Larry and look towards his valuable contributions as the newest member Pof our BOD."

Mr. Segerstrom is a (bilingual) Professional Engineer and Geologist with over 35 years of technical, operational, and business experience, including exploration, mine geology, and operations, as well as 20 years of senior leadership experience. He is currently the Project Manager for Prime Mining's Los Reyes gold-silver project. His previous executive responsibilities are COO of Paramount Gold and Silver Corp. and Manager of Geology of the Grasberg Mining District for Freeport-McMoRan. Mr. Segerstrom has been credited for many discoveries; most recently, from 2015 to 2020, he worked for Azucar Minerals Ltd., exploring and developing the El Cobre project in Veracruz, Mexico, an 11,860 ha property with copper-gold porphyry mineralization over a four-kilometer strike length. Azucar has discovered five copper-gold porphyry zones on the site, spanning a 4-5km trend from Norte in the northwest to Encinal in the southeast.

Bam Bam Resources Corp. (CSE: BBR) (OTC Pink: NPEZF) (FSE: 4NPB) is engaged in the identification, review and acquisition of latter stage copper and copper/silver/gold assets. This is in direct response to the growing worldwide demand and lack of supply for precious metals fueled by the Green New Deal in the US and most other developed nations with similar programs aimed at addressing climate change.

Mr. Segerstrom is a (bilingual) Professional Engineer and Geologist with over 35 years of technical, operational, and business experience, including exploration, mine geology, and operations, as well as 20 years of senior leadership experience.

Such programs are heavily reliant on silver, gold and especially copper to produce Electric Vehicles and other renewable power sources, as well as building infrastructure to provide clean and affordable electricity. www.skillings.net | 23

SURFACE MINING

Surge Battery Metals: Northern Nevada: First Outcomes of the Lithium Exploration Programs

Surge Battery Metals Inc. stated last month that the Northern Nevada Lithium Project (NNLP) in Elko County, Nevada, has completed a weather-shortened soil sample program.

24 | SKILLINGS MINING REVIEW February 2022

R

angefront Exploration provided a four-person crew to collect 445 samples on 100-meter and 50-meter lines spaced 100 meters apart. The project was initially set to collect 1,000 samples. However, due to delays caused by Covid difficulties and a lack of workforce, full-scale sampling was postponed until November 29, 2021.

The Northern Nevada Lithium Project currently comprises 95 unpatented lode claims covering approximately 770 hectares.

Global sample processing facility in Elko, Nevada. The soil sample program was created to follow up on lithium levels of up to 1,980 ppm Li in stream sediments collected by their Nevada-based geologist in the district.

The geologist was guided to the drainage, where the follow-up samples were taken by high lithium values (74.8 and 780 ppm Li) in a public US Geological Survey database. The Northern Nevada Lithium Project currently comprises 95 unpatented lode claims covering approximately 770 hectares.

The geology consists of a series of air and water-lain tuffs that are protected

by a thick layer of welded ash-flow tuff.

Lithium-rich claystone or hydrothermally altered ash and ashy sediments are the NNLP's primary targets.

Surge Battery trades under the symbol NILI on the TSX Venture Exchange, where it is listed as a Tier 2 Issuer. Surge Battery has been permitted to trade on the Pink Markets under the symbol NILIF, at the request of the Company, beginning December 30, 2021.

Mergent Manuals and News Reports list the Company, and it trades on the Frankfurt Stock Exchange under the ticker FRA:DJ5C.

Early December snowfall and following storms brought the sampling program to a close early for this winter season. When ground conditions allow in the spring of 2022, the Company intends to resume this exploratory program.

On December 20, 2021, the first exploratory soil samples were sent to the ALS www.skillings.net | 25

UNDERGROUND MINING

The Gold Search Story Continues!

26 | SKILLINGS MINING REVIEW February 2022

Following preliminary findings from a series of local exploratory activities, mineral exploration company Geophysx Jamaica Limited has advanced to phase three of the project, in which it looks to confirm commercial deposits ranging in gold, copper, and rare earth minerals.

W

e have now completed the first two phases and know what we are looking for in the areas of interest," said Robert "Bobby" Stewart, chief executive officer of Geophysx, in response to questions from the Jamaica Observer following a press briefing held at the Ministry of Transport and Mining.

The project was started last year in April 2018. It is dubbed the most extensive exploration program in the mining business outside of bauxite. It possesses exploration licenses for copper, zinc, gold, and other minerals. Over 40,000 geochemical investigations have been performed to date across local terrain — both virgin and limestone-covered lands — to establish the presence of minerals in areas of interest, which are now limited to gold, copper, and rare earth occurrences.

"Phase one and two have revealed us numerous places where we will focus since we know there is something there but aren't sure how to characterize it yet; therefore, phase three is expected to define it based on the samples acquired." We'll start getting information from that in the next three months, and work will continue throughout the year as we make further discoveries in an environmentally sound and non-disruptive manner," Stewart added.

The privately-held project, funded by the company's founder, has already spent over $1 billion to cover costs related to exploratory activities, including general assessments of the island's mineralogy and geochemistry. The project, which now employs 28 people, including geology

graduates from the University of the West Indies (UWI), is also being carried out with the help of international consultants that include geophysicists, geologists, explorationists, and geochemists.

"As a local company, we focus on developing local talent," Stewart said, adding that while he couldn't calculate potential returns on investment at the present, substantial developments in remaining exploratory efforts will undoubtedly add significant value to the local economy.

"I believe the kinds of discoveries we're looking for will generate a lot of money locally and within the communities where they're discovered," he said.

Minister of Transport and Mining Robert Montague said he was "overly impatient" for confirmations on the current advances in the mining sector. "There was some scepticism when I introduced the initiative in Parliament because people thought just limestone and bauxite would be present, but surveys have showed that there is'something else,' and we are now working to confirm that something else."

He highlighted that, despite the effects of the new coronavirus epidemic, the mining industry had remained a powerful cash source for the country, contributing considerably to national GDP and generating billions of dollars in revenue annually.

"We consequently hope that these additional explorations would improve employment prospects for our people, as well as foreign exchange profits for the country," the minister remarked. www.skillings.net | 27

Greatland Gold Gives Out Proceedings of the Juri JV final Exploration The last set of drill results from the initial 2021 drill program at Greatland Gold plc's Juri joint venture (JV) with partner Newcrest Mining Ltd. was announced last month in January by Greatland Gold plc, mining development and exploration company focused on precious and base metals.

Highlights All assay results for the first phase of the Juri JV drilling campaign on the Paterson Range East and Black Hills tenements have been received (which form the Juri JV with Newcrest).

Mineralization that was discovered at Black Hills hole BHD003 comprises: • 7.9 m at 0.16 g/t gold (Au) from 157 m (including 1 m at 51 ppm arsenic [As]).

• 6 m at 0.14 g/t Au from 178 m.

• 7.85 m at 0.18 g/t Au from 191.15 m (including 0.9 m at 24 ppm bismuth [Bi]; 4.9 m at 26 ppm As).

• 7.3 m at 0.13 g/t Au from 208 m.

The GEM survey was completed, resulting in the identification of many attractive EM conductor candidates for the drilling program in 2022.

Drilling in BHD003 intersected a 60-meter thick anomalous zone of weak to moderate copper (Cu)-gold mineralization, which corresponded to zones drilled by Greatland in the past. The higher-grade Au crossings are strongly related to anomalous Bi-As multi-element chemistry.

Greatland will remain as Manager of the Juri JV after December 31, 2021, also.

The results of the remaining five holes and the results of the ground electro-magnetic (GEM) survey have been received, in addition to the first four holes disclosed initially on September 1, 2021.

The first phase of drilling at Juri consisted of nine holes totaling 4958 meters, with five holes on the Paterson Range East license testing the Goliath, Outamind, and Los Diablos targets and four holes on the Black Hills license testing the Parlay, Saddle Reefs, and Saddle South targets.

"We are happy with the whole set of results from the initial drilling program under our Juri JV with Newcrest," said Shaun Day, CEO of Greatland Gold plc.

Eight of the nine holes assayed from this campaign yielded gold mineralization, which is an exceptional strike rate."

28 | SKILLINGS MINING REVIEW February 2022

"These findings, combined with the discovery of multiple additional conductor targets from the ground EM campaign, boost our confidence in the Juri JV assets' prospectivity and help us better understand the geology of the targets on the JV ground."

ALLETE Senior VP and CFO Robert Adams announces retirement plans DULUTH, Minn.—ALLETE (NYSE:ALE) announced Senior Vice President and Chief Financial Officer Robert Adams will retire from the company later this year. As part of a planned transition, Adams will remain at the company until June 2022.

A

dams has held a variety of roles in his morethan-35-year career with ALLETE, working directly with both rate-regulated and non-rateregulated/diversification activities, since joining the Duluth-based company in 1987 as a financial analyst.

investor-owned utilities, relative to company size, in a recent study. “I’ve always said ALLETE’s people, through their engagement, collaborative nature and highly innovative capabilities, are a unique and key ingredient to the ‘special sauce’ behind the company’s achievements,” Adams said.

He was named vice president of finance of Minnesota Power in 1997, chief risk officer and vice president of business development in 2008, and promoted to senior vice president of energy-centric businesses in 2015, where he had responsibility for three of ALLETE’s operating units: Superior Water, Light and Power; BNI Energy; and U.S. Water Services, Inc. In 2017, he advanced to senior vice president and CFO of ALLETE. He was also heavily involved in several successful company startups and was CEO of Reach-All Manufacturing for a period in the early 1990s.

“Bob led many of ALLETE’s successful diversification initiatives during his long career, and his strategic financial leadership has been integral to ALLETE’s clean-energy transformation,” said ALLETE Chair, President and CEO Bethany Owen. “Bob has recruited and developed strong, talented, and experienced finance and accounting teams, who will continue to serve ALLETE with disciplined, strategic, and values-based leadership well into the future.

ALLETE is a stronger, more resilient company because of Bob’s many contributions throughout his distinguished career, and we wish him the very best in his upcoming retirement.”

Owen said Adams’ financial discipline serves the company well, evident in the 2015 acquisition of U.S. Water Services, Inc., an integrated water-solutions company, and its sale in 2019 to strategically redeploy capital into the growing renewable energy sector. That strategically reinvested capital helped secure ALLETE’s rank as the second-largest investor in renewable energy among North American

SOLVING YOUR MOST COMPLEX CHALLENGES. With SEH, you are a true partner and collaborator.

Engineers | Architects | Planners | Scientists 800.325.2055 | sehinc.com/subscribe

www.skillings.net | 29

MARC MESA CAPODICASA FOUNDER AND CEO, ECO – SOIL GROUP WWW.ECOSOILGROUP.COM

30 | SKILLINGS MINING REVIEW February 2022

PiM

profiles in mining

To achieve a breakthrough in mining productivity we must rethink entirely how mining works, from A to Z. More often than not, innovation gets confused with business improvement. However, the way I see innovation is by doing things in structurally different ways and not by doing things we currently do faster, cheaper, and better.

ECOSOIL GROUP

We are a Global Innovative Engineering Technology Company that offers the most efficient and cost-effective solutions in soil stabilization, roads construction, dust suppression, and erosion control via 100% ecological products.

Our technologies, esoliTSS®, econTDS®, and esumTST® are specifically manufactured by the highest standard of quality to guarantee long-lasting results and to reduce the negative impact that conventional soil stabilization, roads construction, and dust suppression methods have on the environment, amongst other benefits.

Interview with Mr. Marc Mesa Capodicasa What is it that sets Ecosoilgroup apart for a sustainable future? Which are the most prominent names who have approached you?

Our offices in Miami and London are strategically located to offer all our customers an efficient and record-time answer to all their queries, no matter the time difference!

Motivated by the need to use greener practices and be part of the inevitable movement towards sustainable mining, we have been approached by the likes of Anglo American, Newmont, Aluminum Corporation of China, Nexa Resources, Barminco, LafargeHolcim, amongst

others, to provide cutting-edge solutions that best suit their soil stabilization and dust control needs. They say that EcoSoil Group couldn’t have done it better.

The engineering team really helped these companies in determining the best fit for their dust control problem. The product, after several months of being applied, remains effective as expected by our customers. Swift communication and the quality of our products is something that our customers love. We offer amazing products that act as antidotes to dust problems in mining and road constructions. www.skillings.net | 31

PROFILES IN MINING

What are some best practices of dust control (mining) To have a successful dust control project is important to follow certain steps or best practices that will allow you to have a dustless mining environment. Between 78%-97% of dust generated in a mining operation comes from haul roads. This is why it's imperative to control dust on your mining haul roads before you do anything else. The first thing you need to do before controlling dust on your haul road is to determine the road usage and the expected traffic volume.

SOME OF THE QUESTIONS YOU HAVE TO ASK YOURSELF ARE:

Which type of vehicles will be using the road?

What's the average number of vehicles that will use the road per day?

What's the average weight of each vehicle?

How many wheels does the average vehicle have?

The answer to those questions will allow you to determine the ideal path and width of the road as well as the required depth of the base material.

Let's say the road will be used by haul trucks weighing more than 120 tons and the traffic volume is high, which is most of the cases in mining operations.

In this case, the road design must be kept straight with fewer curves to allow the dump trucks to have a safe driving experience. Note that dump trucks' maneuverability is limited so the fewer curves the road has the better.

Secondly, you need to prepare the road.

To increase the effectiveness and durability of your road, you must first grade the road, crown, and compact the road, build the shoulders, and finally build the ditches. When grading the road, the ideal moldboard horizontal angle must be 32 | SKILLINGS MINING REVIEW February 2022

PiM

profiles in mining

between 30 and 45 degrees. The motor grader speed must be kept at a slow and steady pace of between 5 and 8 kph. Also, the crowning of the road surface should be between 4% and 6% of the cross slope.

Less than 4% and water won't flow to the ditches and accumulate on the surface, creating potholes, and a crown of more than 6% will cause erosion and lead to unsafe driving conditions. Drivers can feel a slight loss of control if the crown is too excessive as their vehicles want to slide towards the shoulder.

refers to the problem as washboarding.

This problem brings more complaints than any other from truck drivers and when it becomes severe, can lead to loss of truck control. Motor grader operators are usually blamed for this problem but in reality, they seldom cause it.

THE MAIN CAUSES OF WASHBORADING ARE:

1.

2.

3.

4.

Lack of moisture, poor quality material, bad driving habits and a lack of surface crown.

After grading and crowning the After the road has road, you must been prepared, Nowadays, many mining compact it at 95% you're ready to companies around the world of the soil's maxiapply the dust mum dry density. suppressant of are controlling dust using To avoid delays, your choice. water which is the most make sure your A lot goes into equipment is choosing the right inefficient and cost-intensive working properly. dusting agent method to control dust. On After compaction, for your dust you must build control project, average, mining companies the road shoulder but assuming use 150,000liters of water per which serves you choose the day. At that rate, you could several important right one, you functions. First, it need to know the fill up an Olympic swimming supports the edge precise applipool in just 16 days! of the roadway, cation rate per provides a safe square meters. area for drivers When applying to regain control the dusting agent, of their vehicles, it's important you and it also plays an essential role in draincover the whole road width and apply it age carrying the water further away from the road surface into the ditch. evenly on the road surface. The best equipment to carry out a good application The ideal depth and width of the ditch is is a water truck of at least 5,000 liters of 30 cm. You have to make sure the ditches capacity and with a pressurized spray bar on either side of the road must be clear mounted on the back. of debris to ensure proper drainage. It's important to take into account that areas How can we decrease the water with heavy water runoff will require consumption dramatically when conlarger ditches. One of the consequences, trolling dust (helping the environment when a road is not well-prepared, is in the mining process)? corrugation or as everyone in the field Nowadays, many mining companies www.skillings.net | 33

PROFILES IN MINING

Many communities surrounding mine sites face a huge challenge in this domain as many companies take up the majority of the community water supply to control dust and road maintenance.

Fortunately, there are dust suppressants available on the market that can reduce water consumption by more than 80% and in many cases by 100%. This allows the mining company to increase productivity, decrease haul roads operational and maintenance costs, and decarbonize their operations faster to achieve netzero emissions as stipulated in the Paris Agreement.

What is the future of dust control for the mining industry and how it can help decrease the overall mine operational costs?

Even though most of the dust generation in mine operations comes from haul roads, there are other several ongoing activities within the mine pit that are major sources of dust generation. These activities include drilling, blasting, loading of coal, and overburdening material.

Marc Mesa Capodicasa

around the world are controlling dust using water which is the most inefficient and cost-intensive method to control dust. On average, mining companies use 150,000 liters of water per day. At that rate, you could fill up an Olympic swimming pool in just 16 days! The problem with applying water is that its effectiveness is short-lived.

As soon as you apply it, the water evaporates, and you'll need to do the application once again. In hot temperatures, you'd need to apply water between 6-7 times

per day every single day! By doing so, your haul road operational cost will increase dramatically as well as your equipment maintenance cost. Just imagine how much fuel you'll consume per day in this never-ending cycle.

On the other hand, water scarcity already affects every continent as water use has increased globally at more than twice the rate of population increases in the last 100 years. This is why is imperative to treat water as a scarce resource with a far stronger focus on managing its demand.

34 | SKILLINGS MINING REVIEW February 2022

Controlling dust in all those activities has involved over many decades the use of products that are not sustainable in the long term and products that are not environmentally friendly. This is why I think the future of dust control for the mining industry goes through the development of ecological dust suppressants that don't pose negative threats to the environment, animals, and human beings. It also goes hand-in-hand with the development of products with a low frequency of application.

The good news is that the development of such a product will help the mine to decrease the overall operational costs while helping the planet at the same time.

Let me explain with an example how you can achieve it.

PiM

profiles in mining

Assuming you're using water or chloride salts, such as Magnesium or Calcium Chloride, to control dust in your mine operations, it's fair to say your costs will go through the roof. Both methods require a huge number of products and constant road maintenance, and the frequency of application for both methods is high. If you also consider that the effectiveness of both products is very low, your cost will increase even more. The road maintenance alone will account for an important part of your budget as it has to be carried out every few weeks and, in many cases, every single week if the traffic volume is high. Alternatively, if you have a product that requires preparing the unpaved road only once before the first application and the frequency of application is at most twice per year, you will automatically decrease the mine operational costs which in turn will increase the overall profitability.

As you can see it's a win-win situation for all the parties involved. It's a win for the mine, a win for the environment, and a win for the mineworkers who are the most exposed to dust.

application. Assuming the dust suppressant you're going to apply is the right one for your specific project requirements, the time a well-prepared unpaved road can last without dust goes from months to only weeks if the road is not prepared properly.

Another fatal mistake is to assume you can alter the application rate of the dusting agent without asking first your supplier. To save money, companies apply less than the recommended application rate with the expectation that the product will last the same and cover a larger area. Not developing a dust control maintenance program is another fatal and common mistake crisis companies make.

Before you develop such a program, you need to determine if you want to control dust long-term, short-term or do partial or full-depth soil stabilization. It´ s important to have your objectives clear from the beginning so you can develop a dust maintenance plan that fits your

project needs. If what you are treating is a road, you need to determine if the right solution is to control dust or stabilize the soil permanently. Stabilizing the soil would reduce almost completely the generation of dust coming from vehicular traffic. The speed at which you can see the benefits will depend on whether you are doing a full-depth soil stabilization, a topical application, or the type of material used. However, the project may not require such a scale of construction, and with a short or long-term dust control maintenance program, and taking into account weather conditions, you can see the benefits almost immediately.

A dust control maintenance program should not only include the frequency of application or the selection of a good dust suppressant product among the dozens of products that are on the market. You should also take preventive measures, such as speed limits and transit schedules of heavy loads if possible.

Name some fatal mistakes that companies make when controlling dust.

Controlling dust may seem like an easy task and in some aspects it's however, many companies take it slightly and end up making fatal mistakes that cost them money, time, and in some cases to some fatalities. One of the mistakes companies make is to apply water or a dusting agent without preparing first the unpaved road.

This is a very common one because they think they can save a few thousand dollars by skipping the road preparation part and going straight to the dust suppressant application. The effectiveness and durability of any dusting agent decrease significantly if the unpaved road is not well-prepared prior to the product

Dust-Control. www.skillings.net | 35

PROFILES IN MINING

Where is mining progressing in the coming decade?

The mining industry is transitioning into a low-carbon operation in-order to be aligned with the goals of the Paris Agreement.

Even though fossil fuels have helped us to improve our living standards since 1800, greenhouse gas emissions have led to global warming. In order to avoid the catastrophic consequences of global warming, countries must decarbonize their energy system by 2050.

The good news for the mining industry as a whole is that a low-emission energy and transportation system requires lots of minerals than with a fossil fuel-based economy. On the other hand, I think mining companies will have no choice but to go into frontier mining areas as mineral resources in low-risk countries are becoming exhausted or develop new technologies for processing and minerals extraction.

I think the mining sector will experience major changes one decade from now and one of those changes will be the implementation of more ecological solutions to everyday operational challenges such as material transportation and dust-related problems. On the water-consumption front, companies will move toward water conservation or re-utilization in their operations.

And last but not least, I see consolidation in the industry. Many companies were brought to their knees due to the pandemic, but others have come out on the other side with stronger balance sheets. And those companies are the ones that may take advantage of M&A opportunities.

What is the role of innovation and creativity in the mining domain?

An industry without innovation and creativity is doomed for failure and the mining sector is no different from that reality.

Before you innovate you have to be creative, in other words, there is no innovation in any industry without creativity. The role of these two key aspects goes through the development of new technologies that ultimately lead to maximize productivity in every part of the mining process. Nowadays the productivity topic takes a more relevant focus as worldwide mining operations are 28% less productive than 10 years ago.

And to achieve a breakthrough in mining productivity we must rethink entirely how mining works, from A to Z. More often than not, innovation gets confused with business improvement.

However, the way I see innovation is by doing things in structurally different ways and not by doing things we currently do faster, cheaper, and better.

36 | SKILLINGS MINING REVIEW February 2022

Part of this confusion is why the mining sector is cataloged as a slow innovative industry. But the reality is the sector is as innovative as the manufacturing industry for example. We just have to look at it in a different way.

Up until a while ago, the mining sector was a vertically integrated business where all the processes and activities took place within a corporation. But if you take a closer look at the industry now, you notice there has been a series of corporate strategies and disruptive technologies that have led to a de-verticalization of the industry as a whole. It used to be a one-company-does-it-all and it's now many companies integrated into the supply chain to accomplish a shared goal.

What has been the impact of Covid-19 on the mining industry in the last two years? And where do you see it going forward?

The mining industry like any other sector of the global economy has been badly affected by the Covid-19 crisis.

Mining companies' operations have suffered mainly by isolated outbreaks and shutdowns especially in markets like Peru, Chile, and South Africa.

However, unlike other parts of the economy, the mining sector's response to the crisis has been swift, aligned, and driven by two important priorities. First, to protect at all cost the health and safety of employees and the local communities surrounding their operations. And second, by protecting the disrupted supply chain and laying the groundwork to support long-term recovery.

Even though the pandemic is posing a big challenge to the mining industry, it's fair to say that it has also created many opportunities for mining-related companies. There are always opportunities to be found even in the worst of a crisis if you know where to look.

For example, many professional service-type jobs are running remotely now, eliminating commutes and decreasing operational costs. Similarly, companies have reduced business travel which has resulted in more family time for employees and an increase in productivity. Also, many mining companies were forced to revise their business models to generate more value for employees and shareholders alike.

Up until the pandemic arrived, the industry was having concerns on the ESG front. However, with the implementation of safety and emergency measures and reductions in some operations, the sector has put more emphasis on the "S" in ESG (Social). And I think this is where the mining industry is heading towards. It's heading into a focused-people approach.

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SPECIAL FOCUS

Underground Mining Market To Go Upto US$ 25 Bn By 2031 COMPREHENSIVE INSPECTION SOLUTIONS FOR MINING GIANTS BEHIND THE REVENUE GAINS

Underground mining operations, particularly in coal mining, will present a significant growth opportunity; the underground mining business in Latin America has huge income potential. Investments in upgrading drone technology to open up new revenue streams; adoption of field investigation tools to increase worker efficiency and assure safe mining operations.

A

nalysts in the underground mining market niche agree that efforts by players in the mining industry to make large-scale use of flying drones will have a revolutionary impact on growth dynamics.

The high demand for various types of contractual mining services and equip-

ment inspection solutions is estimated to boost the market value to US$ 25 billion by 2031.

Underground mining operations have become safer and more reliable thanks to technological developments in equipment, infrastructure, and services. Coal, metal, and mineral mining services are among the most important.

38 | SKILLINGS MINING REVIEW February 2022

Notably, the increasing use of field research instruments, particularly drilling and rock blasting, has allowed mining corporations to reduce deaths while increasing output.

According to analysts, the increased usage of inspection technologies to improve equipment health is producing profitable income streams.

www.skillings.net | 39

SPECIAL FOCUS

Key Findings of Underground Mining Market Study Underground Hard Rock Mining Services to See Significant Demand: To access revenue streams in the underground mining business, service and solution suppliers are eagerly revealing revolutionary complex rock mining technologies. Mining businesses are embracing comprehensive field inspection solutions to improve safety in their operations. These aid in the mitigation of the many risks associated with hard rock mining in complex geological settings.

Companies Collaborating on a Large-Scale Drone Application: Drones that fly and the technologies that go with them are helping to improve the safety and productivity of underground mining operations. According to analysts in an in-depth examination of the dynamics of the underground mining sector, advances in sensors have helped enhance their application in mapping the environment.

Stakeholders are endeavoring hard to make sure that the drone and the remote controller have a seamless radio signal connection.

Drone technology is anticipated to gain traction in the underground mining business due to this.

Comprehensive Solutions and Integrated Studies To obtain a competitive edge, players are offering complete solutions in underground mining operations. This was particularly relevant to the management of hazardous waste in mining activities, such as cyanide and sulfide dust. Furthermore, mining businesses benefit from integrated studies that assist transfer laboratory findings into real-world mining operations, enhancing the underground mining market's revenue potential.

Key Players Mining businesses have been actively investigating supply chain gaps that have arisen as a result of the COVID-19 problem to enhance their revenue sales in the underground mining industry in recent times. They're working with local communities to improve supply chain systems and overcome obstacles. For example, they hold virtual sales meetings and provide online training.

SOME OF THE KEY NAMES IN THE UG MINING NICHE ARE:

BHP Glencore Thyssen Mining OZ Minerals Alcoa Corporation Norilsk Nickel Impala Platinum Limited Rio Tinto

40 | SKILLINGS MINING REVIEW February 2022

Anglo American Plc. Global Underground Mining Market: Segmentation Underground Mining Market by Equipment Drilling Equipment Loaders & Trucks

Ventilation Systems Conveyor Systems Rock Reinforcement Systems Others (Draglines, Shovels, Continuous Miners, and Shuttle Cars)

Key Drivers in the Underground Mining Market Metal and mineral demand is expected to expand significantly, particularly in developing nations, supporting the underground mining market's evolution. Lignite, chromite, bauxite, copper ore & concentrates, lead & zinc concentrates, diamond, limestone, and phosphorite are only a few of them.

Advances in commercial coal mining have created many opportunities for underground mining operations to supply the demand for coal in various end-use sectors. Coal is extensively deployed in electricity generation and the steel and cement sectors.

Regional Growth Dynamics in the Underground Mining Market For the next few years, the underground mining business in Latin America is expected to be lucrative.

Because of the abundance of various minerals throughout Latin America, the region has become a center for mineral mining, production, and export. According to the global underground mining industry analysis, significant investments by mining businesses in the region are fueling the regional market's growth potential.

Significant adoption of mining automation technologies in Peru, Mexico, and Chile has sparked regional investment.

UNDERGROUND MINING MARKET BY METHOD

Supported Cut-andFill Stoping Stull Stoping Square Set Stoping Unsupported Room-and-Pillar Shrinkage Stoping

Sublevel Stoping Caving Longwall Mining Sublevel Caving Block Caving Underground Mining Market

by Operator Contract Mining Owner Mining

UNDERGROUND MINING MARKET BY REGION

North America The U.S. Canada Europe Germany The U.K. France Turkey Russia & CIS Rest of Europe

Asia Pacific

China

India

Australia

Indonesia

South Korea

ASEAN Rest of Asia Pacific

Latin America Mexico

Brazil Peru Chile Venezuela Ecuador Colombia Rest of Latin America Middle East & Africa

Angola Nigeria South Africa The Democratic Republic of the Congo Ghana Rest of the Middle East & Africa

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SPECIAL FOCUS

The State of Precious Metals Mining stocks appear to have stagnated in 2021, despite having their financial houses in order and being well-positioned for success. "A lot of it goes back to the story that you see in the market," Coyne (Sprott’s Ed Coyne) says. For the more significant part of the year, the Fed has been discussing tapering.

42 | SKILLINGS MINING REVIEW February 2022

SPECIAL FOCUS

The Federal Reserve has hinted at rising interest rates in the coming year or two.

In traditional stocks, there's an ancient adage that you should buy the rumor and sell the news. Precious metals, on the other hand, are the polar opposite.

You sell the rumor, the rumor being that they're going to hike rates and start tapering."

"PEOPLE SAY, WHY HASN'T GOLD DONE BETTER, OR WHY HASN'T SILVER DONE BETTER? WHY HAVEN'T THEY DONE WORSE?" I SAY THAT BECAUSE, WITH GOLD AT $1,750 TO $1,850 AN OUNCE AND SILVER AROUND $22-$24 AN OUNCE, I WOULD EXPECT PRECIOUS METALS TO BE DOING MUCH WORSE THAN THEY ARE IF THE S&P 500 WAS UP MORE THAN 20%. THAT, WE BELIEVE, IS A SIGNIFICANT LONG-TERM BULLISH SIGN."

The market has moved away from precious metals as a result of the story surrounding them, but Coyne notes that risk-off assets have suffered lackluster conditions across the board. The requirement for risk-off assets has been considerably reduced since the market has soared by 20% this year and recovered from volatility.

"People say, why hasn't gold done better, or why hasn't silver done better?" Coyne says in response to these circumstances.

I'd counter with, "Why haven't they done worse?" I say that because, with gold at $1,750 to $1,850 an ounce and silver around $22-$24 an ounce, I would expect precious metals to be doing much worse than they are if the S&P 500 was up more than 20%.

That, we believe, is a significant long-term bullish sign." Coyne goes on to say that, while the asset class has weakened in the short term, the medium- to long-term trend for gold is up-and-coming.

Edward C. Coyne Senior Managing Director, Global Sales, Sprott Inc.

Equities, according to Coyne, follow in the footsteps of tangible assets. The margins of equities companies would diminish if gold was selling off. With all-in sustaining costs for mining corporations ranging between $900 and $1100 per ounce, a gold price in this range is incredibly profitable right now, even if it is flying under the radar thanks to the rise of cryptocurrencies.

"These statistics are stunning to me when you think about the calibre of these firms today," Coyne says while discussing the

current state of mining corporations.

It's more appealing when you compare enterprise value (EV) to EBITDA. When it is the question of to free cash flow, the miners have twice as much as the S&P. Their return on capital is even higher.

The comparison of net debt to EBITDA is lower. The miners are often lower-leveraged businesses with higher profit margins. "Right now, mining equities are the ultimate value trade." Inflation, according to Coyne, will be with us for a long time, adding that the Fed has eliminated the term "transitory." He believes that some items will become astronomically more expensive over time, particularly as the shift to carbon-neutral footprints drives up the cost of hard assets.

Precious metals, according to Coyne, are long-term benefactors of continued inflation, which benefits alternative currencies like gold, which have historically outperformed inflation. "The historical 'set it and forget it' approach to 60/40 stock-

44 | SKILLINGS MINING REVIEW February 2022

bond portfolio just isn't getting it done," he says, noting that alternatives in general — not just precious metals, but also real estate and other assets — are becoming required aspects of any sound portfolio.

He believes that combining bonds with gold can help to secure a portfolio.

Coyne also talks about the state of other precious metals like copper and Sprott's newest investment, uranium, which he sees as crucial to a carbon-free future. He also sees value in metals used in batteries, such as cobalt. "In New York City,

you can't stroll down the street or travel on any major highway without seeing an electric car." As a result, we believe the market for battery metals is exciting."

Sprott, he believes, will become more involved in that market in the future.

The Sprott Actual Gold Trust PHYS allows investors to invest in physical gold.

PHYS is entirely devoted to gold, which is securely stored, convenient to buy and trade, and redeemable. The Sprott Physical Silver Trust (PSLV) provides silver exposure. Meanwhile, the Sprott

Gold Miners ETF (SGDM) and the Sprott Junior Gold Miners ETF (SGDM) provide exposure to gold stocks (SGDJ ). The Sprott Physical Uranium Trust (UU) offers uranium exposure.

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STATISTICS

NOVEMBER 2021 CRUDE STEEL PRODUCTION

W

orld crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 143.3 million tonnes (Mt) in November 2021, a 9.9% decrease compared to November 2020.

CRUDE STEEL PRODUCTION BY REGION

Africa produced 1.5 Mt in November 2021, up 37.4% on November 2020. Asia and Oceania produced 98.3 Mt, down 15.5%.

The CIS produced 8.8 Mt, up 5.8%. The EU (27) produced 12.9 Mt, up 3.7%. Europe, Other produced 4.3 Mt, up 4.4%. The Middle East produced 3.8 Mt, down 5.3%.

North America produced 9.7 Mt, up 9.3%.

South America produced 3.9 Mt, up 3.5%.

TOP 10 STEEL-PRODUCING COUNTRIES

The 64 countries included in this table accounted for approximately 98% of total world crude steel production in 2020.

Regions covered by the table: Africa, Asia and Oceania, CIS, European Union (27) Europe, Other, Middle East, North America, South America.

China produced 69.3 Mt in November 2021, down 22.0% on November 2020.

India produced 9.8 Mt, up 2.2%. Japan produced 8.0 Mt, up 10.7%. The United States produced 7.2 Mt, up 13.8%. Russia is estimated to have produced 6.5 Mt,

Table 1. Crude steel production by region nov 2021 (mt)

% change nov 21/20

Table 2. Top 10 steel-producing countries

jan-nov 2021 (Mt)

% change jan-nov 21/20

nov 2021 (mt) china

1.5

37.4

14.7

31.1

98.3

-15.5

1,264.9

1.3

8.8

5.8

97.0

6.8

12.9

3.7

141.4

17.0

russia

europe, other

4.3

4.4

46.7

12.1

south korea

middle east

3.8

-5.3

37.4

-0.3

germany

north america

9.7

9.3

108.3

17.8

south america

3.9

3.5

42.1

20.7

143.3

-9.9

1,752.5

4.5

africa asia and oceania cis eu (27)

total 64 countries

up 9.4%. South Korea produced 5.9 Mt, up 2.7%. Germany produced 3.4 Mt, down 0.3%. Turkey produced 3.4 Mt, up 6.1%. Brazil produced 3.1 Mt, up 2.5%.

Iran is estimated to have produced 2.7 Mt, down 5.2%.

69.3

% change nov 21/20

jan-nov 21 (mt)

% change jan-nov21/20

-22.0

946.4

-2.6

india

9.8

2.2

107.3

19.3

japan

8.0

10.7

88.4

16.8

united states

7.2

13.8

78.8

18.9

e 6.5

9.4

69.7

7.1

5.9

2.7

64.6

5.6

3.4

-0.3

36.9

13.5

turkey

3.4

6.1

36.7

13.4

brazil

e 3.1

2.5

33.4

17.4

iran

e 2.7

-5.2

25.7

-3.4

The 64 countries included in this table accounted for approximately 98% of total world crude steel production in 2020. Regions and countries covered by the table: Africa: Egypt, Libya, South Africa. Asia and Oceania: Australia, China, India, Japan, New Zealand, Pakistan, South Korea, Taiwan (China), Vietnam. CIS: Belarus, Kazakhstan, Moldova, Russia, Ukraine, Uzbekistan. European Union (27). Europe, Other: Bosnia-Herzegovina, Macedonia, Norway, Serbia, Turkey, United Kingdom. Middle East: Iran, Qatar, Saudi Arabia, United Arab Emirates. North America: Canada, Cuba, El Salvador, Guatemala, Mexico, United States. South America: Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, Venezuela

46 | SKILLINGS MINING REVIEW February 2022

CRUDE STEEL PRODUCTION DECEMBER 2020. Source – World Steel Association COUNTRY

DEC 2020

DEC 2019

%CHANGE DEC-20/19

2020

% CHANGE

COUNTRY

DEC 2020

DEC 2019

%CHANGE DEC-20/19

2020

% CHANGE

Austria

530 e

521

1.7

6 665

-10.2

Mexico

1 550 e

1 361

13.9

16 854

-8.3

Belgium

359

505

-28.9

6 119

-21.1

United States

6 434

7 292

-11.8

72 690

-17.2

Bulgaria

40 e

43

-6.3

485

-14.3

Croatia

15 e

7

101.9

47

-32.0

North America

9 107

9 801

-7.1

101 119

-15.5

388

326

19.0

3 651

-21.4

2 886

2 462

17.2

30 971

-4.9

Argentina

Czech Republic

408

359

13.7

4 465

0.6

Finland

339

186

81.8

3 500

0.8

France

1 155

918

25.7

11 596

-19.8

Chile

105 e

109

-3.5

1 165

2.8

Germany

3 137

2 835

10.6

35 658

-10.0

Colombia

110 e

97

13.5

1 126

-15.5

94

17.0

1 430

5.9

Ecuador

50 e

50

0.5

477

-21.5

164

-44.8

1 513

-14.5

Paraguay

3 e

3

-4.4

22

-17.5

1 404

6.9

20 200

-12.9

Peru

105 e

91

15.8

671

-45.4

Uruguay

5 e

5

-7.2

47

-24.6

Venezuela

2 e

0

315.8

29

-43.6

3 654

3 143

16.3

38 158

-8.4

Egypt

994

574

73.0

8 229

13.4

Libya

73

63

16.2

495

-18.4

297

-1.5

3 877

-37.0

934

45.5

12 600

-10.1

2 224

19.6

29 030

13.4

85

186

-54.3

1 218

-52.4

Saudi Arabia

440

664

-33.8

7 775

-5.1

United Arab Emirates

280

297

-5.8

2 722

-18.2

3 465

3 371

2.8

40 745

2.7

China

91 252

84 692

7.7 1 052 999

5.2

India

9 796

9 383

4.4

99 570

-10.6

Japan

7 526

7 785

-3.3

83 194

-16.2

South Korea

5 952

5 880

1.2

67 121

-6.0

380 e

261

45.6

3 743

13.3

1 700 e

1 693

0.4

20 570

-6.3

Thailand

410 e

357

14.8

4 420

4.1

Vietnam

1 600 e

1 876

…

19 500

11.6

118 616

111927

6.0

1 351 117

1.6

473

449

5.4

5 490

0.0

59

57

3.8

586

-12.2

533

506

5.2

6 076

-1.4

Greece Hungary Italy

110 e 90 1 500 e

Luxembourg

113

97

17.3

1 886

-11.0

Netherlands

540

521

3.6

6 054

-9.1

Poland

680 e

642

5.9

7 890

-11.9

Slovenia

50 e

34

45.0

570

-8.5

Spain

891

765

16.4

10 934

-19.5

Sweden

410

376

8.9

4 409

-6.6

United Kingdom

710 e

550

29.0

7 185

-0.5

Other E.U. (28) (e)

680 e

642

6.0

8180

-12.1

10 665

10.2

138 786

-11.8

European Union (28) 11 757 Bosnia-Herzegovina

75

70

6.5

759

-5.2

Macedonia

33

24

35.9

180

-24.8

Norway

41

40

3.2

624

0.5

Serbia

119

158

-24.8

1 456

-24.6

Turkey

3 403

2 893

17.7

35 763

6.0

Other Europe

3 671

3 185

15.3

38 782

3.9

Byelorussia

200 e

225

-11.2

2 490

-5.0

Kazakhstan

355 e

374

-5.0

3 835

-7.2

45 e

35

28.2

465

18.7

Russia

6 110 e

6 159

-0.8

73 400

2.6

Ukraine

1 906

1 561

22.1

20 616

-1.1

84

-4.8

950

42.6

Moldova

Uzbekistan

80 e

C.I.S. (6)

8 696

8 438

3.1

101 756

1.5

Canada

1 070 e

1 092

-2.0

11 078

-14.1

20 e

22

-8.5

181

-21.4

El Salvador

8 e

8

-5.7

79

-22.5

Guatemala

25 e

26

-3.9

237

-22.6

Cuba

Brazil

South America

South Africa

292 e

Africa

1 359

Iran

2 660 e

Qatar

Middle East

Pakistan Taiwan, China

Asia Australia New Zealand Oceania

Total 64 countries (1) 160 858

151 969

5.8 1 829 140

-0.9

(1) - HADEED only. (2) - the 64 countries included in this table accounted for approximately 99% of total world crude steel production in 2019. e - estimated

www.skillings.net | 47