Canadian Mining Journal August 2013

Canadian Mining Journal
c a n a d a s f i r s t m i n i n g p u b l i c a t i o n
www.canadianminingjournal.com
August 2013
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Departments
5 Editorial
This month Editor Russ Noble talks about how The Great Recession Still Lingers and why certain individuals, particularly those involved with Investor Relations, may find themselves looking for new work thanks to the current state of mining in Canada.

Contents
6 Mining Matters
Canadian Mining Journals popular look at whats making news across the country.
9 Investing
15 Cover Story
22 Still on Top
Canadas Top 40
Canadian Mining Journals popular Top 40 Mining Companies in Canada feature compares the countrys top producers.
15
Ned Goodmans regular Investing column talks about why its a good time to buy gold.
10 Law
This month Norton Roses Avril Cole addresses the issues related to Negotiating development agreements in tough times.
22
12 In My Mine(d)
Current trends make it wise to invest in community relations, according to Lisa Hardess, Principal of Hardess Planning Inc.
An in-depth profile article on Agrium, once again Canadas top producer in CMJs Top 40 survey.
50 Company Profile
Niagara Tunnel Job

28 A Mining Marvel
Underground specialists from around the world marvel at the design and engineering of the recently completed Niagara Falls Tunnel Boring Project. 28
This months featured company is RDH Mining Equipment of Alban, Ontario.
60 CSR and Mining
Marketa Evans, Extractive Sector, CSR Counsellor, Government of Canada, defines what CSR is worth to miners.
62 Unearthing Trends
Jay Patel, a partner at Ernst & Young, Toronto, and the firms Canadian mining and metals transactions leader, looks at Finding opportunities as headwinds continue in Canadian mining.
Exploration and Development
32 Sites & Solutions
Junior E&D companies from coast to coast are experiencing a challenging time as investors are being cautious about spending money during the economic slowdown.
32
CANADIAN Mining Journal

c a n a d a s f i r s t m i n i n g p u b l i c a t i o n
August 2013
ABOUT THE COVER This months cover by Art Director Mark Ryan clearly spells out the focus of Canadian Mining Journals popular Top 40 August issue.
For More Information
Canada Post Canadian Publications Mail Sales Product Agreement No. 40069240
Please visit www.canadianminingjournal.com for regular updates on what's happening with Canadian mining companies and their personnel both here and abroad. A digital version of the magazine is also available at www.digital.canadianminingjournal.com
Coming in September
Gold in Canada

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August 2013 Vol. 134 No. 6 80 Valleybrook Drive, Toronto, Ontario M3B 2S9 Tel. (416) 442-5600 Fax (416) 510-5138 www.canadianminingjournal.com Editor Russell B. Noble 416 510-6742 rnoble@canadianminingjournal.com Field Editor Marilyn Scales 613 832-9087 mscales@canadianminingjournal.com Art Director Mark Ryan Production Manager Print Production Manager Steve Hofmann Phyllis Wright
Editorial
When IR means Inventory Reduction

By Russell Noble
ell before I started writing this column, I warned myself that Circulation Manager what Im going to talk about is Cindi Holder 416 442-5600, ext. 3544 probably going to stir up a few emotions cholder@bizinfogroup.ca from a certain percentage of my readers. Publisher But, after weighing the odds, I said, What Robert Seagraves 416 510-6891 the heck, go for it, because in part, thats rseagraves@canadianminingjournal.com what Editorials are supposed to do. Stir up Sales thoughts and emotions. Western Canada, Western U.S.A. Bonnie Rondeau Ive done it before, sometimes to the 416-510-5245 point that I get Letters to the Editor tellbrondeau@canadianminingjournal.com Toll Free Canada: ing me how far off base I was and did I 1-800-268-7742 ext 6891 or 5245 really think what I talked about actually Toll Free USA: 1-800-387-0273 ext 6891 or 5245 happens in the real world of mining? Group Publisher Admittedly, sometimes I wonder if my Doug Donnelly comments are totally fair and accurate President Vice-president because theyre mostly based on observa Bruce Creighton Alex Papanou tions because I work in an editorial Established 1882 Canadian Mining Journal provides articles and information of practical office, not a mine, so what I say usually use to those who work in the technical, administrative and supervisory aspects of exploration, mining and processing in the Canadian mineral exploration and comes from what I see and hear when mining industry. Canadian Mining Journal (ISSN 0008-4492) is published 10 times a year by Business Information Group L.P. BIG is located at visiting a site and talking with the people 80 Valleybrook Dr., Toronto, ON, M3B 2S9. Phone (416) 442-5600. who actually work there. Legal deposit: National Library, Ottawa. Printed in Canada. All rights reserved. The contents of this magazine are protected by copyright and may be used only Like I said, I work in the comfort of for your personal non-commercial purposes. All other rights are reserved and commercial use is prohibited. To make use of any of this material you must first dust and dirt free, air-conditioned or obtain the permission of the owner of the copyright. For further information heated office and its only when I do a site please contact Russell Noble at 416-510-6742. Subscriptions Canada: $47.95 per year; $76.95 for two years. USA: US$60.95 tour that I actually talk with miners per year. Foreign: US$72.95 per year. Single copies: Canada $10; USA and foreign: US$10. Canadian subscribers must add GST and Provincial tax where necessary. directly. For some reason, they never call, GST registration # 809744071RT001. but they sure do talk when they meet me? From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not Anyway, what Im getting at comes wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-800-668-2374; Fax: 416-442-2191; from a recent article entitled, The Great E-mail: privacy officer@businessinformationgroup.ca; Mail to: Privacy Officer, Recession Still Lingers in which the Business Information Group, 80 Valleybrook Dr., Toronto, ON, M3B 2S9. Publications Mail Agreement #40069240. PAP Registration No. 11000. We author talks about the current state of acknowledge the financial support of the Government of Canada through the Publication Assistance Program towards our mailing costs. Return undeliverwoes around the world and how some able Canadian addresses to: Circulation Dept., Canadian Mining Journal, 80 Valleybrook Dr., Toronto, ON, M3B 2S9. E-mail: bigcirculation@bizinfogroup.ca countries have been economically savaged Canada Post: Publications Mail Agreement PM40069240. Please forward and have destroyed job prospects for Forms 29B and 67B to 80,Valleybrook, Toronto, ON M3B 2S9. future generations. Canadian Mining Journal, USPS 752-250. US office of publication: 2221 Niagara Falls Blvd., Niagara Falls, NY 14304-5709. Periodicals Postage Paid at Niagara Falls, The article went on to talk about the NY. US postmaster: Send address changes to Canadian Mining Journal, PO Box 1118, Niagara Falls NY 14304. erosion of job security and the growing We acknowledge the financial support of the Government of Canada through the Canada Magazine Fund toward our editorial costs. wage gap between those fortunate enough to be near the top and everyone else. But, and what I liked most about the article, was that it also mentioned the growing trend for those near the top having to look over their shoulders too because many of their high-paying jobs are also under the microscope. Canadian Business Press Indexed by Canadian Business Periodicals Index

In fact, some I would guess, based on the number of For Sale signs on two of Canadas most posh neighbourhoods (Torontos Lakeshore Drive near Port Credit, and the world-renowned Bridal Path and Post Road district in the heart of the city) have already received their cardboard box and walking papers. In any event, its happening, and to get back to my original comment about the percentile of readers Im probably going to upset, I think that almost every IR (Investor Relations) person in Canada should have one of those cardboard boxes close to their desk. I know its a harsh thought but in reality, most IR jobs are probably in jeopardy because try as they do, getting people to invest in mining right now is close to an all-time low and from what I hear and read about going forward, the money just aint there. Just look at the price of gold and the number of companies that are suspending, or even walking away from projects. And who can blame them? When profit margins reach minimal to none, its time to regroup and thats why I think many people near the top of their organizations will now have more time to worry (about their own job) during this nonproductive period. And its not just the IR people I mentioned earlier who are almost like inventory and in a disposable position, its all the other top-wage earners who are becoming a drain on the companys dwindling dollars. Sure, some have probably been so for many years, but now its time to thin the herd, so to speak, and take care of the business by reducing costs. And, like it or not, people (especially those in suits), are one cost that can be controlled, and reduced. I know its a sad reality but so too is the current state of mining. CMJ
Matters Mining
A Look At Whats Newsworthy From Across The Country
The Diavik Mine rescue team.
Diavik mine rescue team competes at northern event Congratulations to the Diavik Mine rescue team, winners of two events at the 56th Annual Workers Safety and Compensation Commission mine rescue competition held in Yellowknife earlier in the summer. Diaviks team won the underground obstacle and underground bench/field test events. Teams from Diavik, Ekati, Snap Lake, and Cantung mines participated in the underground competition with Ekati winning the overall underground competition. The underground competition includes fire fighting, underground obstacle, rope rescue, first-aid, underground bench/field test, underground smoke, and written exam tasks. The mine rescue competition, which included teams from Canadas three territories, was held in Yellowknife during
mining week. Day two of the competition included the annual miners picnic hosted by the Northwest Territories and Nunavut Chamber of Mines.
Diaviks mine rescue team is comprised of volunteers from the mine sites overall emergency response team which includes 60 individuals who train year round. Nfld/Lab Geological Survey makes historic data available
The Geological Survey of Newfoundland and Labrador is pleased to provide its mineral exploration clients with an update on a recently completed technical review of its collection of historic exploration files. This collection includes non-confidential technical material (informally known to current users as p-files) donated to the Department of Natural Resources. These reports are currently housed at the Geological Survey, in hard copy format only. Following the review, a selection of these archived files has been scanned, and is now available as online Geofiles. For user convenience, a linked list of these new geofiles is available in the http://www.nr.gov.nl.ca/nr/mines/investments/ investments.html. Explore Newfoundland and Labrador area of the website under Search our Industry Geodata Collection. These new Geofiles include information from regional, grass-roots surveys, most of which were completed in the period 19801990, and not previously reported upon in submitted assessment reports. The information is pertinent to exploration for a variety of commodities, most notably gold. For further information on the Geofiles collections, please contact: cindysaunders@gov.nl.ca
6 | Canadian Mining Journal August 2013
Replacing a divot is not an issue, its just a matter of picking it up and taking it to the next shot at this course in Yellowknife.
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Investing
Economist Pippa says Buy Gold Now and I agree

Ned Goodman is President and Chief Executive Officer of Dundee Corporation
By Ned Goodman
nd I say that she is totally correct. The global monetary system today rests on a very fragile foundation of trust with paper US dollars sitting as the base of the heart of the global monetary system. The collateral of the US dollar is that they tell you they can always print more, so why worry? Pippa is Philippa Malmgren, a Ph.D. economist, and she definitely knows more about the fragility of the global monetary system than most, including me, notwithstanding having warned my Dundee shareholders in our recent annual report that I am more bullish on the price of gold than ever and am looking forward for the gold price to have a seismic move upwards. And, yes, both Dr. Malmgren and I are aware that the recent days of gold prices have been very negative. Philippa Malmgren has a strong
Gold bulls have a rare chance to double up now.

resume, including having been special assistant to the President for economic policy during the Bush administration, and who today works with a long list of the worlds bigger banks and many otherwise impressive clients. She believes, like we all should, that Gold bulls have a rare chance to double up now. As inflation pain continues to make headlines, no emerging market investors have any illusions. Inflation for them is here for the duration. A gold-backed Yuan is increasingly sounding like a sensible idea. The recent bilateral currency deals with Australia, France, Russia, Singapore
- Philippa Malmgren
and many others reflect Chinas desire to displace the US dollar as the worlds reserve currency. Pippa believes that event is likely to happen and that the Chinese want the Yuan to emerge as a hard, gold-backed currency in a world where everyone else has chosen to inflate and devalue. Robert Wenzel of the Economic Policy Journal in an article about Pippa said: One wonders, given that she consults with the likes of Barclays, UBS Warburg, Deutsche, Bank of America and scores of others whether this is a common opinion within her circles. CMJ
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Law
Negotiating development agreements in tough times

Avril Cole is a lawyer with Norton Rose Fulbright Canada.
By Avril Cole
inross Gold Corporations recent announcement that it will not proceed with further development of the Fruta del Norte project in Ecuador has refocused attention on the perennial debate about the equitable allocation of natural resource wealth among key stakeholders. This debate is also the focus of the 2013 Africa Progress Report issued by the Africa Progress Panel. The report identifies the obtaining of a fair share of natural resource wealth and equitable allocation of the proceeds by African governments as two of the most pressing governance challenges in the extractive sector across the African continent. These issues are a growing concern for many of Canadas mining companies with mineral assets in developing countries. Aligning Objectives The details of the fiscal regime to apply to a mining project are often the subject of lengthy negotiation between host governments and mining companies. Such negotiations typically include many separate items such as corporation tax, withholding taxes, royalties, resource rent taxes, turnover tax, capital allowances, capital gains, GST or VAT related taxes, valuation fees, import and export duties and the period of time for which they are stabilized (life of the project or some other negotiated period) as well as the host governments right to participate in the project. The mining companys investment in infrastructure, its community development obligations and similar costs are also often the subject of intense negotiation. From a host governments perspective, the objective is to maximize revenues and
ancillary economic benefits, and provide an investment climate which can attract future revenue streams while protecting communities and the environment. From the mining companys perspective, the objective is to obtain a fiscal regime and resulting internal rate of return which are attractive to outside investors and allow for a financeable project. Not only are mining companies and their investors concerned with the specifics of the fiscal regime such as the overall effective rate of tax, they expect reasonable assurance that the regime will not be fundamentally altered before they have had a chance to recoup their investment. Investor perceptions of risk (uncertainty of the commodity price, operational risk, development risk, policy risk and so forth) and the availability of developed infrastructure, cheap energy and skilled labour also have a bearing on the appropriate level of taxation. Aligning the disparate objectives of host governments, communities and the mining companies can be technically challenging and changes in underlying market conditions often add to the complexity. In some cases, it may be that these objectives are irreconcilable and the development of the mine must at a minimum be postponed until more favourable conditions exist. Impact of Current Market Climate Host governments in many resource rich developing countries have been slow to react to the current crisis in the mining industry reflected in rising costs, commodity price volatility, falling share prices and decimated market capitalizations. Notwithstanding the sensitivity of internal rates of return to commodity prices,
many developing countries are paradoxically demanding higher returns from natural resource development. For mining companies seeking fiscal concessions from governments during this period of rapidly declining market conditions, it is important that the impact of softening commodity prices on project economics be conveyed to the host government in as close to real time as practicable. In addition to providing market information, this may also include adjustments to the financial model such as revising base case revenue projections. When the negotiations occur at a time when market conditions are unfavourable, consideration may be given to watering down stabilization clauses in an effort to obtain greater up-front concessions. For example, instead of having a stabilization clause that extends for the life of the project, the parties could agree to a review of the negotiated concessions in the event of a material change in project economics. As the mining company will want to limit the possibility of a review being triggered by a simple reconsideration of the deal by the government, care will need to be taken to ensure that the materiality threshold that would trigger a possible review is quite high. The Africa Progress Report 2013 calls for governments to reform tax regimes to be more responsive to market conditions. The report calls for royalty rates for example to be indexed to commodity prices to ensure a more equitable participation in revenues by governments especially during periods of economic boom. This would also allow for governments to share the pain during periods of market decline. CMJ
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In My Mine(d)
Current trends make it wise to invest in community relations

Lisa Hardess, MCIP, RPP, is Principal of Hardess Planning Inc. lisa@hardessplanning.com
By Lisa Hardess any mining companies focused on exploration are reluctant to invest in building community relations until they have good assurances that a prospective ore body can be extracted profitably. Yet current trends are such that if people in the local community see too many unfamiliar pickups and aircraft, theyll start to get concerned and those concerns can ripen into hostility and opposition that can cause delays, higher costs and even a full stop to development. However, there are many ways that mining companies can build good relations right from the beginning, and they dont have to cost the earth. In the initial stages of exploration, when you dont yet know if you will even be working in the area long-term, find out which aboriginal Nations traditional territory youre on. Send a letter, fol-
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lowed by a phone call to say hello, who you are, what youre known for (do you have a good environmental and social record?), what next steps could be (e.g. no-go or exploration permit) and that youll be in touch. It is important to respect protocol and have your Chief Executive Officer reaching out to their Chief. If there is an opportunity in their territory and you are moving forward with exploration, nows the time for more involved relationship building. You may have the permit you need from the respective government granting agency, but you still need a social license to operate. Create process and predictability where it doesnt formally exist, or youre at risk from work stoppages that could dwarf those caused by environmental or licensing delays. In most cases, this second stage will involve a trip to the community. Make this trip count, both for you and for the community (theyre busy too, you know!). Do a bit of homework about who they are, what language they speak, whats happening in the community.This will help you make a better first impression, demonstrate respect for First Nations unique status in Canada, and ensure you dont show up in a remote community dressed in a suit (and yes, they will notice and snicker if you do). Dress nicely but casually and for the weather! Understand that people are looking for meaningful ways to be part of the proposed project. In addition to trucking and labour jobs, consider a track that would lead to community members working in management roles, learning skills they can use elsewhere. Be open to suggestions and look for win-win opportunities. Bring a hostess-type gift, since you are asking them to host you. Refreshments for the meeting, a big tin of coffee for the Band office, or if you can handle the aroma on the trip up, a bucket of KFC! Ask your contact in the office what people would like and pack it along remember that in most cases you are traveling to remote communities where grocery store food and supplies are expensive for them. On a recent trip I was asked to bring USB keys for staff to use and as door-prizes for the youth. Find out if people in the community speak their local language and if so, offer to pay for a translator (someone in the community they identify and bring in) for the meeting. You would do well to pay a respected local Elder to open and close the meeting. In short, its a good idea to treat a trip to a remote First Nations community in Canada much as you would an international visit. Inform yourself of the issues the community is facing, local culture and protocols, and present your ideas in light of what youve learned. CMJ
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| Canadas Top 40 Miners
40
of our
By Field Editor Marilyn Scales ast year, 2012, almost all commodity prices softened, and that fact is reflected in the fortunes of Canadas Top 40 mining companies. Gross revenues, the number on which we base our ranking, grew little if at all. However, the most successful companies will weather the industrys cyclical downturns. Note the 10 companies that lead our list. Nine of them remain among the top 10. The exception is Cameco that fell from 10th to 11th, trading places with Yamana Gold. The other nine miners among this years top 10 were among the top 10 last year. With one exception they held the same positions as last year Teck jumped up one to 3rd, pushing Suncor down to 4th. The list is again headed by Agrium

Little change among the top performers
Finest
Next year may be a different story. Barrick (as were other gold miners) was hit in the first half of 2013 by the lowest gold price in three years. The yellow metal slid to US$1,192 on June 28, 2013. The company was hurt at the same time by news that the Chilean government ordered a halt to construction of the showpiece PascuaLama gold project, at least the portion that lies within its jurisdiction. Barricks share price was hobbled by the decision despite continuing work on the Argentine portion. The resulting loss of market capitalization was enough to allow Goldcorp to become the worlds largest gold miner. Teck Resources ($10.34 billion) rose one position in this years survey, filling the 3rd slot despite a roughly billion-dollar-drop in revenues. Part of its success must be
($16.69 billion) that mines potash at Vanscoy, Sask., and phosphate at Kapuskasing, Ont. Mining is not the companys only business; it is a retail supplier of agricultural products and services throughout the Americas and Australia. The world needs to eat, and its appetite for fertilizer appears to be strong. Again in second place is Barrick Gold ($14.55 billion). Long the largest gold miner in the world in terms of market capitalization, Barrick has been under pressure from both the lackluster gold price and skyrocketing development costs. Nonetheless, the company increased its 2012 revenues by 2% over 2011. But the company had a net loss of $677.0 million in 2012, compared to a net profit of $4.54 million the year before.
15
Canadas Top 40 by Gross Revenue

(millions of Canadian dollars )
Company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Year End Type Revenue
2012
Net Earnings (loss) Assets Revenue
2011
Net Earnings (loss) Assets
Agrium Barrick Gold Teck Resources Suncor Energy Potash Corp. of Saskatchewan Goldcorp Kinross Gold Canadian Oil Sands Trust First Quantum Minerals Yamana Gold Cameco Agnico Eagle Mines Sherritt International IamGold KGHM International Eldorado Gold Inmet Mining Pan American Silver New Gold Lundin Mining Hudbay Minerals Dominion Diamond Osisko Mining Centerra Gold Nevsun Resources Uranium One Golden Star Resources Thompson Creek Metals Semafo Dundee Precious Metals Endeavour Mining Mirabela Nickel China Gold Alamos Gold Capstone Mining Mercator Minerals B2Gold Imperial Metals Crocodile Gold Taseko Mines
Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Jan 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31
Potash Gold Base metals & coal Oil sands Potash Gold Gold Oil sands Base metals Gold Uranium Gold Nickel & coal Gold Base metals Gold Base metals Silver Gold Base metals Base metals Diamonds Gold Gold Gold-Copper Uranium Gold Molybdenum Gold Gold-Copper Gold Nickel Gold Gold Copper-Gold Copper Gold Base metals Gold Molybdenum
16,686,000 14,547,000 10,343,000 8,378,000 7,927,000 5,435,000 4,311,400 3,905,000 2,950,400 2,336,762 2,321,471 1,917,714 1,840,200 1,670,000 1,385,400 1,147,541 1,123,977 928,594 791,300 721,106 702,550 702,043 665,375 660,737 566,039 562,900 550,540 401,400 388,500 384,685 346,097 343,398 332,387 329,372 305,515 262,621 259,051 257,783 255,930 252
1,498,000 (677,000) 870,000 458,000 3,081,000 1,749,000 (2,509,700) 981,000 1,869,400 442,064 264,583 310,916 33,200 371,200 103,800 318,058 330,076 87,513 199,000 123,180 (21,170) 24,443 78,424 (183,998) 246,696 (96,700) (725) (546,300) 77,800 29,831 ( 8,556) (452,875) 77,004 117,972 59,592 (128,686) 51,907 32,626 (40,207) 27
15,977,000 47,282,000 34,617,000 36,897,000 18,206,000 31,212,000 14,882,400 10,171,000 7,536,400 11,800,163 8,215,020 298,068 6,758,300 5,376,200 3,690,400 7,928,129 6,483,868 3,387,979 4,283,700 3,990,451 3,487,824 1,630,936 2,668,446 1,554,131 873,696 3,237,500 725,876 3,410,200 n/a 972,185 1,755,813 118,689 1,806,264 753,856 1,512,710 477,979 676,452 659,732 478,637 995
15,470,000 14,236,000 11,514,000 8,583,000 8,715,000 5,362,000 3,842,500 3,875,000 2,683,500 2,173,325 2,385,404 1,821,799 1,978,300 1,673,200 1,106,900 1,104,737 337,100 855,275 315,200 783,786 890,817 623,963 263,408 1,020,344 547,770 530,400 471,007 (546,300) 395,900 338,480 147,227 303,642 311,312 227,364 327,765 262,981 225,352 253,175 108,131 278
1,375,000 4,537,000 2,768,000 2,603,000 1,775,000 1,881,000 (2,013,000) 1,144,000 654,800 548,294 449,844 (568,055) 197,300 428,000 266,500 347,223 947,911 354,146 179,000 183,765 (163,588) 47,530 17,997 370,878 250,034 88,400 (2,075) 292,100 111,800 72,129 (20,068) (50,761) 86,823 60,333 60,426 91,691 56,300 48,708 (33,569) 149
13,140,000 48,884,000 34,219,000 35,131,000 16,257,000 20,374,000 16,508,800 8,620,000 5,298,000 10,769,940 7,616,350 179,447 6,497,500 4,393,800 3,529,000 3,960,405 3,689,471 1,951,796 3,368,700 3,864,325 2,455,004 1,603,575 2,069,242 1,688,618 775,226 3,303,300 727,678 2,994,200 n/a 927,941 962,215 525,510 1,744,544 274,642 1,419,535 612,944 563,041 486,379 256,397 722
attributed to its variety of business segments. The company produces zinc, copper, metallurgical coal and energy. Price downturns of one commodity are not felt equally across all segments of the business. Suncor Energys oil sands revenues ($8.39 billion) put it in 4th place. Although the oil prices have been in the mid-US$85 range reached record daily production of 359,300 bbl/d, revenues fell in 2013 from $8.58 billion. Again in 5th spot is Potash Corporation of Saskatchewan ($7.93 billion), a solid performance but off 9% from 2011. The company operates six potash mines in Saskatchewan and one in New Brunswick. From this solid Canadian base, PotashCorp has grown into a global leader in fertilizer and agricultural products. Goldcorp ($5.44 billion) rings at 6th this year, having overtaken Barrick as the worlds largest gold miner by market capitalization. Goldcorp counts 67.1 million oz of gold contained in its proven and probable reserves at Dec. 31, 2012. By compari-
The Runners-up (C$ millions)

2012 2011
Company 41 Year End Type Revenue Net Earnings (loss) Assets Revenue Net Earnings (loss) Assets
Silver Standard Resources
Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31
Silver Base metals & gold Gold Silver Gold Gold Gold Gold Silver Palladium
241,120 237,607 223,558 208,079 182,939 181,761 168,243 163,622 161,020 160,704
54,826 (15,665) 31,807 42,117 29,553 (8,192) (35,923) 33,231 31,463 (66,037)
1,316,912 147,845 986,447 449,651 477,527 670,506 204,416 765,812 2,897,199 316,263 471,232 251,866 259,999 127,997 156,542 9,777 137,713 83,932 110,004 143,659
80,128 26,974 43,931 15,661 49,644 8,701 (36,662)
1,276,102 994,732 418,586 249,029 609,259 205,329 628,533
42 Taseko Mines 43 Aurizon Mines 44 Endeavour Silver 45 Primero Mining
Amerigo Re46 sources Gran Colombia 47 Gold

48 AuRico Gold 49 Fortuna Silver
176,859 3,179,079 19,533 (65,154) 271,641 416,045
North American 50 Palladium
son, Barrick had 140.7 million oz and produced 7.4 million oz last year. Goldcorps 2012 production was 2.5 million oz. Arguments may be made, depending on your criteria, for either Goldcorp or Barrick being the worlds leading gold miner.
In 7th place is Kinross Gold ($4.31 billion). The company had a banner year as revenues grew 12% over 2011. Too bad earnings did not reflect the improvement. Kinross had a net loss of $2.51 billion, compared to a loss of only $2.01 billion in
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(C$ millions)
Rank 17 23 39 31 19 34 27 37 30 32 22 7 5 21 7 11 18 Company
Top Revenue Gainers

Type 2012 Revenue 2011 Revenue Revenue Change 2012/2011
Inmet Mining Osisko Mining Crocodile Gold Endeavour Mining New Gold Alamos Gold Golden Star Resources B2Gold Dundee Precious Metals Mirabela Nickel Dominion Diamond Kinross Gold Potash Corp. of Saskatchewan Pan American Silver Kinross Gold Cameco Pan American Silver Agrium China Gold
Base metals Gold Gold Gold Gold Gold Gold Gold Gold-Copper Nickel Diamonds Gold Potash Silver Gold-Copper Uranium Silver Potash Gold
1,123,977 665,375 255,930 346,097 791,300 329,372 550,540 259,051 384,685 343,398 702,043 4,311,400 8,619 846 3,900 2,321,471 928,594 16,686,000 332,387
337,100 263,408 108,131 147,227 315,200 227,364 471,007 225,352 338,480 303,642 623,963 3,842,500 6,467 640 2,977 2,385,404 855,275 15,470,000 311,312
+333.4% +252.6% +236.7% +235.0% +150.0% +44.9% +16.9% +15.0% +13.7% +13.1% +12.5% +12.2% +33.3% +32.2% +31.0%
+9.9% +8.6%
1 33
+7.8% +6.8%
Top Earnings Gainers

(C$ millions)
Rank 23 9 34 5 19 1 Company Type 2012 Net Earnings (loss) 2011 Net Earnings (loss) Earnings Change 2012/2011
Osisko Mining First Quantum Minerals Alamos Gold Potash Corp. of Saskatchewan New Gold Agrium
Gold Base metals Gold Potash Gold Potash
78,424 1,869,400 117,972 3,081,000 199,000 1,498,000
17,997 654,800 60,333 1,775,000 179,000 1,375,000
+435.8% +285.5% +95.5% +63.8% +11.1% +8.9%
2011. Like Barrick and Goldcorp, Kinross has a portfolio of projects that hopscotch around the world. Kinross produced 2.6 million attributable oz of gold in 2012. Canadian Oil Sands Trust ($3.91 billion) is holding down 8th spot. Included in the companys revenue is its 36.74% share of Syncrude production. If you extrapolate from the COS number, Syncrude sales would appear to be $10.63 billion in 2012. Syncrude is a private joint venture and not under the same reporting rules as public companies, including COS. As tempting as it might be to put Syncrude into the Top 40 (in 3rd position), the number is merely an estimate since Syncrude has not published a figure of its own. Another base metal producer, First Quantum Metals, sits in 9th place, but watch for this company to rise in next years rankings. Earlier this year First Quantum acquired Inmet Mining and its huge Cobre Panama project. Inmet is 17th on this years Top 40 list, and the combined revenues of the two companies top $4 billion. If 2013 revenues are anything like last years, First Quantum will rise a couple slots a year from now. Rounding out the 10 top mining companies is Yamana Gold with interests in nine producing mines in South America and the Pilar gold development project in Brazil. Dont be mislead by the companys name. It is also a producer of copper, molybdenum, silver and zinc. If a look at the largest Canadian miners is satisfying, a peek at the runners-up is intriguing. The 10 companies that rank 41st to 50th is usually where the most movement in rank occurs. Taseko Mines, Aurizon Mines and AuRico Gold fell out of the Top 40. Perhaps they will bounce up the list next year?
Who is eligible for the Top 40?

Determining a list of Canadas Top 40 mining companies takes time and research. We examine financial statements, annual reports and other public information for almost 100 separate companies. We keep in mind that eligible companies must meet two of the following three criteria: Companies that are traded on a Canadian stock exchange. Companies that are domiciled in Canada. Companies that own or have a significant equity interest in a producing mine in Canada. Companies with a project in the advanced development stage may also be considered. For example, a company with its head office in Toronto and its stock trading on the TSX or TSX-V would meet the above criteria even if all its producing mines are offshore. Companies with foreign head offices, and that do not trade on a Canadian exchange, will not make the Top 40 list even it they have substantial mining assets in this country.
For the 2012 calendar year, the Bank of Canada reported that the average Canadian:U.S. dollar exchange rate was C$1:US$0.99988 virtually at par. That made our job easier in that results reported in greenbacks did not have to be converted to loonies. We make every effort to include all eligible companies. If you believe your enterprise should be listed among the Top 40, please write to the author at MScales@CanadianMiningJournal.com.
New to the list of runners-up this year are Silver Standard Resources, Endeavour Silver, Primero Mining, Gran Colombia Gold, and Fortuna Silver. Interesting that these are for the most part precious metals producers. They made good use of gold and silver prices in 2012, but dipping prices this year may force them down in the rankings next year. While it is well and good for a company to reap billions of dollars in revenue, another measure of success might be to look at how much of the revenue translates into earnings. PotashCorp heads the list of top earners ($3.08 billion), followed by First Quantum ($1.87 billion), Goldcorp ($1.75 billion) and Agrium ($1.50 billion). This is money that can be used to grow the business, explore and develop new mines, or reward shareholders. Out of curiosity, we looked at the companies with the largest asset base and calculated what percentage of the asset base had been translated into earnings. The company with the biggest asset base was Barrick
Top Earners (C$ millions)

Rank 5 9 6 1 8 3 4 10 14 17 16 12 11 25 19 20 Company Type 2012 Net Earnings (loss) 2011 Net Earnings (loss)
Potash Corp. of Saskatchewan First Quantum Minerals Goldcorp Agrium Canadian Oil Sands Trust Teck Resources Suncor Energy Yamana Gold IamGold Inmet Mining Eldorado Gold Agnico Eagle Mines Cameco Nevsun Resources New Gold Lundin Mining
Potash Base metals Gold Potash Oil sands Base metals & coal Oil sands Gold Gold Base metals Gold Gold Uranium Gold-Copper Gold Base metals
3,081,000 1,869,400 1,749,000 1,498,000 981,000 870,000 458,000 442,064 371,200 330,076 318,058 310,916 264,583 246,696 199,000 123,180
1,775,000 654,800 1,881,000 1,375,000 1,144,000 2,768,000 2,603,000 548,294 428,000 947,911 347,223 (568,055) 449,844 250,034 179,000 183,765
($47.28 billion), but it recorded a net loss of $677 million. Kinross also had a loss ($2.5 billion) on assets of $14.88 billion.
Before thinking that gold producers all lost money last year, look to Goldcorp that had net earnings of $1.75 billion and assets
19

of $31.21 billion. That works out to about a factor of 5.6%, firmly in the middle. The companies that had the greatest earnings to assets rating were Agrium (9.4%) and Canadian Oil Sands Trust (9.6%). There are other ways to gauge the size or success of Canadian miners. It is always interesting to look at how much a companys revenues or earnings grew year over year. The fact that only six of the Top 40 companies had earnings gains can be seen as a measure of how the industry is rushing toward a cyclical low. Asset growth is interesting in that it is often a reflection of rising commodity prices. Since commodity prices have been contracting, perhaps the greatest asset growth is a consequence of turning a development project in to a producing mine. Congratulations to all of the companies included in the Top 40. CMJ
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Top Asset Holders(C$ millions)

Rank 2 4 3 6 5 1 7 10 8 Company Type 2012 Assets 2011 Assets
Barrick Gold Suncor Energy Teck Resources Goldcorp Potash Corp. of Saskatchewan Agrium Kinross Gold Yamana Gold Canadian Oil Sands Trust Turquoise Hill Resources Cameco Eldorado Gold First Quantum Minerals Inmet Mining IamGold
Gold Oil sands Base metals & coal Gold Potash Potash Gold Gold Oil sands Copper Uranium Gold Base metals Base metals Gold
47,282,000 36,897,000 34,617,000 31,212,000 18,206,000 15,977,000 14,882,400 11,800,163 10,171,000 9,084,800 8,215,020 7,928,129 7,536,400
48,884,000 35,131,000 34,219,000 20,374,000 16,257,000 13,140,000 16,508,800 10,769,940 8,620,000 6,136,800 7,616,350 3,960,405 5,298,000
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56 11 16 9 17 14
6,483,868
5,376,200
3,689,471
4,393,800
Top Asset Gainers(C$ millions)

Rank 34 16 39 40 31 17 18 12 6 9 21 38 23 19 14 Company Type 2012 Assets 2011 Assets Assets Change 2012/2011
Alamos Gold Eldorado Gold Crocodile Gold First Majestic Silver Endeavour Mining Inmet Mining Pan American Silver Agnico Eagle Mines Goldcorp First Quantum Minerals Hudbay Minerals Imperial Metals Osisko Mining New Gold IamGold
Gold Gold Gold Silver Gold Base metals Silver Gold Gold Base metals Base metals Base metals Gold Gold Gold
753,856 7,928,129 478,637 813,031 1,755,813 6,483,868 3,387,979 298,068 31,212,000 7,536,400 3,487,824 659,732 2,668,446 4,283,700 5,376,200
274,642 3,960,405 256,397 443,312 962,215 3,689,471 1,951,796 179,447 20,374,000 5,298,000 2,455,004 486,379 2,069,242 3,368,700 4,393,800
+304.4% +100.2% +86.7% +83.4% +82.5% +75.7% +73.6% +66.1% +53.2% +42.2% +42.1% +35.6% +29.0% +28.2% +22.4%
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| Canadas Department TopHere Miner

Thanks to the work of Agrium, mountains of stockpiled potash are later used to help produce cash crops for farmers around the world.
Top
on
Still
Agrium repeats as Canadas Top Miner with $16.7B in sales

By Eastern Correspondent DArcy Jenish
grium Ltd. is the king of the Canadian mining industryjudged by revenues and profitabilityand the Calgary-based consortiums position at the top of the heap is as solid as the rock of the Canadian Shield. For one thing, Agrium is a vertical corporation that mines, manufactures, wholesales and retails, and it has operations in North and South America, Europe, Africa and Australia. Furthermore, it is in the fertilizer and plant-supplements business and, given that the world will always need food, the company is more or less shielded from the boom and bust cycles that torment so
many other mining entities, large and small. Agrium reported sales of $16.7 billion in 2012, up from $15.5 billion a year earlier and record profits of $1.5 billion, a slight improvement on its previous profits record of $1.4 billion established in 2011. Mining

represents only a small piece of the overall action, but its mines in Kapuskasing, Ont., Conda, Idaho and Vanscoy, Saskatchewan, 32 kilometres southwest of Saskatoon, provide the essential raw materials that serve as the first link in a value chain that ends with
retailers selling fertilizer by the bag and sometimes they truckload directly to farmers in hundreds of locales around the world. Phosphate rock from the open pit mine in Kapuskasing is shipped to a processing plant in Redwater Alta. The Rasmussen
23

Ridge mine in Idaho is also an open pit phosphate operation, but the reserves are expected to be depleted this year and the company has contracted to secure new supplies from a mine in Morocco. The Vanscoy underground potash mine is Agriums longest-running and it is an enormous operation. It went into production in 1969, it has since yielded more than 18 million tonnes of ore and, according to the 2012 annual report, proven and probable reserves indicate a mine life of 46 years. The reserves are located about a kilometre below ground and the passage ways and mining rooms now extend over 77 square kilometres. As well, the rounded, potash storage building is as long as three city blocks but for all its current size, a major expansion of the Vanscoy operation is nearly complete. Surface works and underground infrastructure are expected to be complete by mid-2014 and the expansion will increase the mines output by about
A crew of dedicated Agrium miners are responsible for helping make the company the top performer in Canada again this year.
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750,000 tonnes per year output, bringing it to nearly three million tonnes in total. The mines are part of Agriums wholesale division, which operates dozens of production and distribution facilities in North America, a smaller number in South America, mainly in Brazil, and one in Egypt. The company also distributes in Europe through a purchase for resale business. The wholesale divisions 15 production facilities are capable of turning out some 9.3 million tonnes of major crop nutrients annually, including 5.4 million tonnes of nitrogen, two million tonnes of potash, a million tonnes of phosphate and 400,000 tonnes of ammonium sulphate. Slightly over 85 per cent of the divisions output is destined for agricultural markets to improve the quality and increase the yields of grains, oilseeds and various other crops. The balance is sold for use in a broad range of industrial applications, including the production of resins used in the construction industry and potash for recycling aluminum. Agriums retail division ensures that its reach extends from mine gate to farm gate. The company operates 1,220 retail locations in Canada, the U.S., Australia, Argentina, Chile and Brazil and they sell crop protection products, nutrients, seed and various other products as well as services. Agrium may well be nearly immune to the ups and downs of commodity markets, but that does not mean it is always shielded from shareholder discontent. In late May, 2012, one of the companys major shareholdersthe New York-based hedge fund JANA Partners LLCproposed that Agrium sell off its retail division in order to enhance shareholder value. That triggered a year-long battle between senior management and JANA. There were two meetings between Agrium executives and representatives of JANAone in mid-July, 2012 and another in Augustand on both occasions Agrium rejected the proposal to break up the company. JANA responded by announcing that it would run its own slate of independent candidates for the board of directors and the battle heated up in earnest. The facts are straightforward, company President and CEO Michael Wilson

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declared in a public statement issued in October, 2012. Agrium remains committed to its highly successful integrated strategy. JANA has been trying for over six months to obtain support for its idea that Agrium should spin off its retail operations. Agriums shareholders have overwhelmingly rejected JANAs ideas.
From extraction (above) to processing (right), Agriums production has made the company known worldwide as a leader in potash mining.
That failed to end the dispute. JANA issued a number of its own statements to convince shareholders to support the break up and Agrium responded by moving its annual general meeting ahead by a month to early April 2013 in order to bring the matter to a close. In March, Agrium Chairman Victor J.
Zaleschuk publicly waded into the fight when he issued a public statement to the effect that: Our shareholders make decisions based on value and credible analysis, not rhetoric, and they are fully capable of distinguishing fact from fiction. JANA has resorted to attempts to deceive our shareholders because its ever-changing arguments have gained no traction. The warring parties went beyond words to try to sway shareholders and win the vote. Agriums board authorized payments of $.25 per share to investment advisors whose clients voted for the full slate of company nominees to the board. Depending on how many share their clients owned, some advisors could have earned as much as $1,500 simply for urging a vote for the company candidates. JANA, meantime, offered its nominees a share of the profits from the sale of its Agrium stock, which was valued at over $1 billion. At the end of the day, shareholders voted for the companys slate of nominees and rejected JANAs candidates and Agrium will remain intact and at the top of heap of Canadian miners for the foreseeable future. CMJ
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| Niagara Tunnel Project

Aerial view of tunnel alignment.
Marvel
Miners power through difficult rock to dig massive tunnel under Niagara Falls
By Russell Noble y definition, mining means (in part): Excavation in earth. and nowhere is that more accurate than when talking about the recently completed Niagara Tunnel Project in Niagara Falls, ON., where contractors tunneled for five years under the city to build a 12.7-m diameter pipe designed to carry 500 m3/ second of water. By any standards, mining or not, thats a huge tunnel and to build it using a single 14.4-m-diameter tunnel boring machine (TBM), along a twisting 10.2 km route, is even more remarkable. In fact, over the *five years it took to dig and bore the tunnel, the machine chewed its way through more than 1.6 million m3 of rock: enough to fill the Rogers Centre, home of the Toronto Blue Jays. (*Mining
A Mining
Photographs courtesy of Ontario Power Generation
started September 1, 2006, and finished March 30, 2011. Completion of the concrete lining, gates, then water-up, was completed March 9, 2013. Therefore, five years for mining and a total of seven years construction). As excavations go, the Niagara Falls Tunnel is huge and called for just about every skill required to build any conventional underground mining project. From initial soil sampling and rock drilling along the route, to more detailed and in-depth geologic analysis of sedimentary formations in the area, to dealing with the potential impacts in the popular tourist city, contractors faced a number of monumental challenges that caught the attention of mining contractors around the world. The concept of building a tunnel of
this size under one of the most popular tourist attractions in the world without disrupting the day-to-day operation of a major city up to 140 m above was a logistical challenge in itself. And, using the worlds largest hard rock boring machine for the first time, just compounded that challenge, said John Tait, Project Manager for Hatch Mott MacDonald. The size of the TBM (tunnel boring machine) was a bit intimidating because many of the crew had never seen or worked with such a monster of a machine. Anything with a cutting head that is more than 14 metres in diameter and is capable of eating the rock the way it did is a marvel in itself. Tait said the crews quickly learned to respect the power of the boring machine and as the tunneling progressed below the city, they encountered and successfully overcame a number of obstacles, including extreme challenges posed by the host rock. Groundwater, in the permeable upper levels where crews tapped aquifers, was a
How the massive machine works
The Robbins Model471-316 tunnel-boring machine is equipped with a six-piece cutterhead assembly featuring two inner cutterhead sections with four outer cutterhead segments. The cutterhead features seventy-seven 20-inch face-and-gage disc cutters and four 17 inch twin disc cutters suitable for the difficult rock conditions on the Niagara Tunnel Project Rotary power is supplied by fifteen 422 HP (315 kW), water-cooled, three-phase VF electric motors that drive the cutterhead through associated gear reducer assemblies. Torque coupling assemblies are mounted to the back of the electric drive motors. Torque coupling with brake assembly is mounted to the back of drive motor position. Cutterhead thrust is furnished by four double-acting hydraulic cylinders, each having a boring stroke of 1729 mm (68 inches). Cutterhead torque and thrust are reacted to the tunnel walls through hydraulically extended gripper shoes. The barrels of the propel cylinders are connected to these shoes to transfer the thrust loading. Steering is accomplished hydraulically, by moving the main beam in relation to the fixed gripper cylinders. This allows the direction of boring to be altered at any point in the boring stroke. The only requirement is to remove cutterhead thrust force during the steering movement. When the boring stroke has been completed, cutterhead rotation is stopped and rear support shoes are extended to support the weight of the machine at the rear. The gripper shoes are then retracted, followed by retraction of the propel cylinders to move the gripper assembly forward. The gripper cylinders are extended again and the rear supports are lifted to clear the tunnel invert. Boring can then resume once cutterhead rotation is restarted. A troughed belt conveyor is used to transport rock cuttings from the cutterhead area to the rear of the machine. The cuttings are then transferred to a continuous conveyor system running back through the tunnel to the disposal area.
Tunnel Boring Machine nearing final assembly.
29
| Niagara Tunnel Project
Concrete drop shaft platform inside tunnel.
Invert bridge and concrete formwork entering the tunnel.
Grout tunnel excavation behind cofferdam in the river.
concern but the biggest issue was the large amount of crown Overbreak in weaker rock formations. But in the end, says Tait, great ingenuity was used to overcome all of the problems encountered and its a credit to everyone who ever set foot on the site over the years that safety and awareness of the potential dangers was a first priority that resulted in the project being completed with a safety record that was twice as good as the industry average, and with no life-threatening injuries. As mentioned earlier, the scope of the $1.6 Billion Niagara Tunnel Project was massive but moreover, courageous because of the stresses to be overcome in the design. Feeding the Sir Adam Beck generating stations with a 27 per cent increase in water, resulting in a 13 per cent increase in average energy output by 1.5 billion kWh per year, involved connecting the Niagara River upstream of the Falls with the Sir Adam Beck stations downstream. In addition to the many feats of engineering that will be mentioned later, the job depended on **Big Becky, the name given to the TBM that worked to connect the Rivers water with the Stations turbines. (**The name was given by a local
school class who won a competition to name it). Rick Everdell, Project Director for the owner, Ontario Power Generation, explained that Big Becky started arriving on site in June, 2006, and after three months of assembly, it started its five-year journey in September by punching its way towards the intake in the Niagara River at a planned rate of 15 m a day. As the machine progressed, Everdell explained that the tunnel (depending on the host rock conditions) was supported with wire mesh, rockbolts, steel ribs and shotcrete. An impermeable polyolefin membrane to prevent swelling of the host shales was also installed, followed by an unreinforced, 600-mm-thick, cast-in-place pre-stressed, permanent concrete liner. For logistical purposes, all other tunnel work was staged at various intervals behind the TBM. Installing the invert membrane and concrete commenced 3000 m behind the boring machine, while tunnel re-profiling work (required to restore the Overbreak) was an additional 1500 m back, followed by arch membrane and concreting 1500 m farther to the rear, and liner grouting and prestressing yet another 1000 m back.
A total of 300 000 m3 of concrete was delivered in to the tunnel using 15 m3 agitator trucks to line the tunnel. Laser scanning was used to monitor deflections to +/-0.5 mm in the concrete lining while prestressing took place by injecting grout behind the concrete liner at pressures up to 20 bar. A convoy of utilities advanced behind the TBM drive including the fresh air duct, conveyor, power and communication cables, lighting, and clean and dirty water piping. As the tunnel progressed, turning and parking platforms were also built for use by construction vehicles and safety/rescue equipment. While much of the Niagara Tunnel story focuses on the underground workings of the project, surface work was also ongoing over the seven-year construction period; most notably the in-water work in the Niagara River for the tunnel intake. In 2006, demolition crews removed an old accelerating wall in the river and in the next year built a new accelerating wall and approach wall as well as drill and blast for the excavation of a 100-m long by 20-m wide and 40-m deep intake channel. Following the excavation, an 8-m by 7-m, 300-m-long drill and blast grout tunwww.canadianminingjournal.com
nel was built to install a grout curtain in the highly permeable rock beds under the river to prevent flooding of the main tunnel when the TBM arrived at that location. A total of 12 concrete pours totaling 6000 m3 for the approximately 35-m high intake structure were required as well as more than 570 tonnes of reinforced steel that was placed within the structure. When the TBM finally reached its goal after its five-year journey and broke through at the intake end of the project, much of the final work involving the interior of the tunnel was right behind it and on schedule. Culminating the work and one of the more momentous events was the installation of the intake sectional service gate which allowed the flooding of the intake channel and on March 3, 2013, the tunnel was filled with water from the outlet canal end. At the end of the day, more than 2,700 of them to be exact, The Niagara Tunnel project was complete and it was time to move to another project for the estimated 450 workers on the job knowing that their work will be instrumental in helping produce an estimated 1.5 billion kilowatt hours of new clean electricity for Ontario annually for the next 100 years or more. Thats enough to power a city the size of Kingston, ON. With the project completed, Ontario Power Generation faced one final challenge and that was to demobilize and get rid of the tools and other equipment used during the construction of the project. Some was stockpiled for future use, some was sold for scrap, while more than 1,500 pieces went up for sale at an auction conducted by Ritchie Bros. Auctioneers of Bolton, ON. Some of the equipment sold included more than 40 mobile structures that were used for offices, workshops, storage, locker rooms and shower houses. About 80 trucks, mixers and a multitude of pumps and hoses were also on the block during the two-day auction and not surprisingly, many of the items went to bidders watching the auction from around the world on Ritchie Bros. EquipmentOne online telecast. And, as mentioned at the outset, The Niagara Tunnel Project caught the worlds attention and held its interest to the very end. CMJ

Mobile grouting platform inside tunnel.
Aerial view of equipment auction.
31
| Exploration & Development
Solutions
A look at how juniors make a difference by creating new opportunities
Staff Report s most of the world knows, the Prospectors and Developers Association of Canada is recognized as one of the more respected authorities on whats happening within the exploration and development industry. From its work with government agencies regarding standards, procedures and securities regulations, to Aboriginal affairs and Corporate Social Responsibility (CSR), to its widely popular annual conference and convention in Toronto, PDAC is an organization well versed in almost every aspect of what it takes to find and build a mine. Representing more than 10,000 individual and corporate members across Canada, the Association has a direct pulse on exploration and development from coast to coast to coast, and because of its contact with companies and individuals on the front line of mining, it knows whats happening within the industry on a first-hand basis.
Sites
&
Today its no secret that whats happening within the junior mining sector in Canada, and around the world for that matter, is not too encouraging and by all accounts, it wont be for months to come. There is, in fact, a capital crisis and in December 2012, mining industry analyst John Kaiser caused even more shockwaves to ripple throughout the industry when his research suggested that up to 700 exploration companies could be in danger of disappearing by the end of 2013, with less than $200,000 of working capital in their bank accounts. Kaisers report cast a spotlight on the precarious financial health of the grassroots exploration industry; risktolerant money has been drying up, and what little is out there has been flowing to companies with flagship projects. In response to those predictions, the Board of the PDAC struck an ad-hoc Capital Crisis Committee to investigate the issue and generate ideas for actions that could be taken to shore up grassroots
exploration in 2013. The Committee gathered and analyzed data from a wide range of sources, confirming that companies focused on grassroots exploration were indeed facingserious financing challenges, notwithstanding fairly robust metals prices. The Capital Crisis Committee also identified potential solutions in three areas: facilitating access to capital; maintaining highly qualified people; and shoring up the viability of companies. Tough issues facing the junior mining fraternity have been clearly spelled out by PDAC, and in a report by EY (Ernst & Young) entitled the Canadian Mining Eye in which it says Canadian mining equities continued to significantly underperform given concerns around global economic growth and as a result commodity prices. Gold prices, the Canadian Mining Eye continues, witnessed a historic fall in April with concerns that the Cyprus Government and a few other European countries might sell their gold reserves to raise cash. With
Century Iron Mines Iron Arm Camp, located about 3 km from the companys Joyce Lake project (more details about the project on pages 38-39), is modern and well equipped to serve the needs of staff working in the area.
close to two-thirds of the constituents of the Canadian Mining eye index owning gold and/or silver assets, the direction of precious metals remain important. As far as the outlook for Canadian mining and metals companies is concerned, EY says the sharp decline in equity fundraising witnessed earlier in 2013 is also likely to continue in the near term but opportunities will always exist for those willing to take a long-term view of the sector. Its about balancing cost reduction and operational efficiency efforts with strategic transactions. EY concludes by saying that exploration companies exposed to current capital restraints should be pursuing unique, creative financing arrangements and thinking about how they can advance to the next stage in their growth agenda including consolidation between juniors with cash and those with property, mergers of equals, and streaming deals that

sell off a royalty interest from a nonstrategic asset for up-front financing. Those are all constructive suggestions and the message is clear that creative thinking and looking for new ways to control costs while at the same time maintaining a growth agenda are critical for all companies involved with exploration and development. Jonathan Rudd, a geophysicist and professional engineer with the Torontobased geophysical services company of Quantec Geoscience, says that securing capital for exploration projects has always been a question of telling a convincing story of property quality, strong management and recorded success. But recently, he says; Deeper targets and increasing financial pressures have proved fatal for mining exploration projectswhile tough decisions continue to blight budget management. Youre already watching your budgets closely, but its not enough to make
you stand out. Instead, your competitive advantage rests in altering your exploration process. Now more than ever, your success hinges on the steps you take before you approach investors. Embracing new technology will allow you to demonstrate to investors your ability to extract resources faster and more cost-effectively, and the earlier in your plan that you add new technology, the more you will be able to create a robust, efficient, and effective project so that its easier to prove how youll spend less money, and increase returns more quickly, says Rudd. Traditionally, Rudd explains, exploration companies get a simple, preliminary survey done that gives some reliability in terms of what resources exist in the property, then they seek financing for the drill program but because the drill holes are narrow (sampling only a small portion of the earth) and geology can quickly change, the lack of understanding
33

Helicopters used by VMS Ventures and North American Nickel have helped in the discovery of new deposits thanks to air-borne geophysical technology that enables geologists to evaluate large areas faster.
of the details between the boreholes makes this approach imprecise, unreliable and expensive. You wouldnt be the first company to believe youre sitting on the proverbial gold mine only to feel the frustration of your drill budget running out three feet from the gold deposit. Throwing money at the problem doesnt help; you can get more drilling finance and still not get the results you expected. You could go round, round, and round until finally there are no more investors to approach. Thats how the mining industry gets in troubleand the credibility of a miners promise is ruined. The mining industry has been here before but its vitally important to the future of fundraising, and the future of the junior mining industry, that exploration teams start using new technologies as a matter of best practice, says Rudd. Technology has revolutionized industries before. Surgeons now rely on MRI or CAT scans before making an assessment, rather than older X-RAY technology. Similarly, a reconnaissance or sparse-data geophysical survey provides only a partial picture when
youre trying to demonstrate the quality of a property to investors. By showing investors that you plan to use the latest technology and explaining how the technology will help you avoid notorious exploration problems, you can build a case strong enough to attract multiple investors, concludes Rudd. The preceding comments and predictions are based largely on observations and statistics but the following comes straight from the field, so to speak, as John A. Roozendaal and John Pattison, President and Director, VMS Ventures and Director of North American Nickel (NAN), and Chief Geologist, VMS Ventures and North American Nickel respectively (both companies are based in Vancouver) look at technology (particularly aerial) and how its making exploration easier. Heres what Roozendaal and Pattison have to say. Technology is evolving all the time in the mining industry and progressive exploration and resource development companies are constantly on the lookout for technologies that can help them discover ore bodies faster and at less cost.
It is a fact that, in many of the worlds productive mineral belts, most of the exposed or shallow deposits have already been discovered, but new technologies are now allowing geologists to see deeper and evaluate large areas faster so that discoveries can continue to be made. The use of helicopter-borne geophysical technology, for example, is one of the modern tools that was recently used to help discover a high-grade copper deposit in a mature mining camp in record time. The authors say the company has experienced excellent results by using aerial technology; namely its exploration program in the Flin Flon Greenstone Belt in northern Manitoba and the discovery of the Reed Lake copper deposit. The discovery hole, collared just 100 meters from a paved Provincial highway connecting two longestablished mining towns (Snow Lake and Flin Flon), cored through more than 43 meters of massive sulphide mineralization averaging 4.38% Cu, 1.56% Zn, 0.85 g/t Au and 13.1 g/t Ag. The deposit now has a 43-101 inferred resource of 2.55 mil August 2013 Canadian Mining Journal |
35

Drilling at Century Iron Mines Joyce Lake project.
lion tonnes at 4.52% Cu, 0.91% Zn, 0.64g/t Au and 7.68g/t Ag. The deposit is being developed under a joint venture agreement between VMS Ventures (30%) and Hudbay Minerals (70%). As a result, the developers are now in the position of knowing that Reed Lake will be a producing mine by the end of 2013. Geologists selected the Flin Flon Greenstone Belt because it is one of the more prolific Volcanogenic Massive Sulphide Deposit greenstone belts in the world in terms of dollar value of discovered mineralization per square kilometer. The belt has produced more than 183 million tonnes of ore averaging 2.5% Cu and 4.5% Zn from 27 mines during more than 80 years of continuous production. It is exposed over an area of approximately 12,000 km2; however, an area of at least equal size on the south side of the belt is completely buried beneath much younger, un-mineralized sedimentary rocks completely unrelated to the rocks hosting the ore bodies.
Not surprisingly, says Roozendaal and Pattison, the vast majority of the mines (present and past producing) are situated in the exposed part of the belt while the buried portion has seen little exploration and even less mining activity. It was in this buried portion of the belt that we saw an opportunity to use a new technology in the form of helicopter time domain electromagnetics (TEM) to see through the younger cover rocks and rapidly explore the prospective Flin Flon Greenstone rocks beneath. A technical team quickly assembled a large land package and began looking for a helicopter TEM system to explore it with. Currently, VMSs sister company, North American Nickel Inc., in which VMS has an approximate 27.5% interest, is using even more advanced helicopter TEM technology to explore a large (4,983 km2) grassroots nickel sulphide project called Maniitsoq on the southwest coast of Greenland. While it is located in a relatively remote part of the world, the Maniitsoq project has the advantage of being situated along a year-round pack-ice free coast line and having abundant rock exposure. In the 1960s and 70s, Danish explorers identified a large (over 70 km long) belt of high-grade nickel sulphide occurrences at Maniitsoq but had difficulty following the mineralization in the subsurface. Most of the occurrences are hosted in a rock called norite and for this reason, the belt is referred to as the Greenland Norite Belt (GNB). Two major mining companies explored the belt for nickel in the 1990s but left without drilling. NAN geologists evaluated the GNB in 2011 and decided there was potential to discover economic deposits using helicopter geophysics in combination with diamond drilling and down-hole geophysical surveys. In 2012, NAN surveyed a large portion of the GNB with the VTEM system, identified numerous EM anomalies and drilled nine holes. Three of the holes intersected high grade nickel sulphide mineralization. The mineralization occurs beneath a zone of much weaker, disseminated mineralization that was discovered in the 1960s. In May and June, NAN was able to raise over $7 million to finance a followup drilling at Maniitsoq this year. The money was raised in spite of very chal
lenging market conditions for the mineral exploration and development sector. Continuing on that positive note, Century Iron Mines Corporation of Toronto is another Canadian exploration and development company making news lately thanks to its interests in four iron ore projects in Canada. The Duncan Lake Project is located in western Qubec, and three others, Sunny Lake, Attikamagen, and the Altius Properties, all located in the Labrador Trough region of Qubec and Newfoundland & Labrador. Century Irons current strategy is to develop the DSO (Direct Shipping Ore) projects first (Joyce Lake, Lac Le Fer and Schefferville West), bring them into production starting from 2015, and use the proceeds to develop the lower-grade and more capital-intensive BIF (banded iron formation) projects, e.g., Rainy Lake. The DSO targets have up to 7 Mt each at 60%+ Fe and thus would be mined for three to four years. The first phase of operation
will involve crushing and screening. The material produced will be lump and sinter fines with iron and weight recovery of 100%. Thus, no tailings will be generated. Lower-grade material would be stockpiled at first and processed afterwards. Century Iron plans to bring the Joyce Lake DSO (Attikamagen) project into production in 2015/2016. After that, the Lac Le Fer (Sunny Lake) and Schefferville West (Altius properties) projects should start producing. The company plans to use cash flows from producing DSO projects, plus additional funds, to build a 28-km road from the Rail Loop to the Joyce Lake mine. Later, and in stages, the company intends to build a railway from the Rail Loop to Joyce Lake. There will also be other infrastructure for the BIF projects. The Project The Joyce Lake Direct-Shipping-Ore (DSO) project is part of Century Irons Attikamagen
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project, which is located 15 kilometres northeast of Schefferville, Quebec, in Newfoundland and Labrador. Attikamagen is a joint venture with WISCO and Champion Iron Mines Limited. Century Irons NI 43-101-compliant estimate of March 2013 had shown 10 million tonnes of Measured and Indicated mineral resources at Joyce Lake, with an average grade of 59.45% total iron (TFe)
Picturesque aerial view of Joyce Lake 15 km northeast of Schefferville, Quebec, in Newfoundland and Labrador.
plus an additional 5.6 million tonnes of Inferred mineral resources at a cut-off grade of 50% TFe. This first mineral resource estimate for Joyce Lake was a milestone in the development of Century Irons Labrador Trough iron ore mining camp. The estimate covered only the northern part of the Joyce Lake property, and Century Iron is continuing to advance explora-
The results of the 2013 PEA for Joyce Lake were as follows:
The Net Present Value (NPV), using an 8% discount factor, is $90.4 million pre-tax; $51.8 million after-tax; The Internal Rate of Return is 37.0% pre-tax, and 27.1% after-tax; The payback period is 2.5 years pretax, and 2.6 years after-tax; The mine life is expected to be 4 years, at 1 Mtpy in year 1 and 2 Mtpy
(million tonnes per year) in years 2-4 of iron ore lump and sinter fines; Output is expected to be 65% sinter fines and 35% lump iron ore; The operating costs (loaded on ship at Sept Iles) are estimated at $62.80 per tonne of iron ore; and The initial required project capital is $96.6 million of which $27.1 million
tion beyond the current resource boundaries. The mineralization remains open to the south. The company has two other DSO targets with similar geophysical signatures, about three kilometres south and southwest of Joyce Lake. Highlights Century Iron added considerably to its
resource estimate in 2012 and further in 2013, and is now one of the larger iron ore companies in Canada. Century Iron has two strategic Chinese investors: (1) Wuhan Iron and Steel (Group) Corp. with a 25% equity interest; and (2) China Minmetals Corporation with a 5% equity interest. The company has signed definitive joint-venture agreements with WISCO
for Attikamagen, and Sunny Lake. The agreements will help ensure that Century Iron will have the necessary funds to develop these properties. Information provided by the featured companies and PDAC indicate that Exploration and Development in Canada is alive and still active and despite some troubled times, it will continue to be the envy of the world. CMJ
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7/3/13 9:11 AM
| Exploration and Development
hope
Rich in history, full of
Historic mine, modern technology and future hedges
By Western Correspondent Tanya Laing Gahr
n 1622, the Spanish ship Nuestra Seora de Atocha sank in approximately 16 metres of water off the coast of the Florida Keys, taking with it an almost priceless cache of copper, silver, gold and gems. For more than 350 years, divers and treasure hunters knew of the shipwreck and tried to recover the riches, but it wasnt possible until 1985, when diving technology advanced enough to allow Mel Fisher and a team of salvagers to locate and access the wreckand the sunken treasure. I told you that story to tell you this one. Tim Termuende, president and CEO of Omineca Mining and Metals Ltd. compares the Wingdam Mine and the century-plus quest for its gold to a sunken galleon with untold riches that everyone knows is there but has never been able to claim. That, in part, is what makes the project so exciting. The Wingdam Mine is located about 40 kilometres from the mining town of Barkerville in the historic Cariboo gold district in B.C. This was an area of significant exploration during the gold rush of 1861: over 73.7 million grams (2.6 million ounces) of gold have been reported by placer-miners in the district, with the actual totals likely much higher. Wingdams gold lies atop the bedrock in a deep channel 50 metres beneath Lightning Creek, one of the most prolific placer mining creeks in the Cariboo. The first company to try to access the buried treasure was the Lightning Creek Gold, Gravels & Drainage Company that, in 1896, attempted to drive a drift about 2.4 kilometres downstream of the current Wingdam sitean initiative that was abandoned when,
Len Sinclair (left), President and CEO of CVG Mining Ltd. and Steve Kocsis, P. Geo., take a close look at some of the results of their hard work.
41

A look at some of the historical events that happened at the site.
in the early 1900s, flooding and timber support failure caused the collapse of the drift first and the companys finances second. Next up, Lightning Creek Gold Mines Ltd. (later the Consolidated Gold and Alluvials of British Columbia) conducted extensive drilling to define the location of the channel and establish grades. The goal was to use the Australian deep-lead mining method in order to drift from the bedrock into the pay gravels in
Underground work at the site.
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the channel below the creek. During this time, the village of Wingdam was established near the mines shaft-works in the 30scomplete with a local baseball team fittingly named the Wingdam Moles and all looked well until a massive cave-in in March of 1938 brought the enterprise to a halt. The works sat idle until 1961 when the Wingdam & Lightning Creek Mining Co. Ltd. pumped out the shafts, extended the workings downstream, and began mine development work in 1964. The company reported sampling that indicated that values average out to over $6 million per mile (approximately $470 million per kilometre at todays prices). Alas, the success was short-lived as yet another cave-in ended operations altogether for more than two decades. In the meantime, more bad fortune beset the site as a fire in the 1970s decimated the shaftworks and virtually eliminated the last reminders of the town of Wingdam. In a century of sporadically successful production, only 58,000 grams of gold (1,700 ounces) had been recovered. The works sat dormant until 1992, when Gold Ridge Resources Ltd. used more modern technology, hydraulically jacking a 1.06-metre pipe out into the channel from the bedrock rim to access the pay gravel. Unfortunately, their aim was slightly off; the pipe ended up sit-
ting just above the gold. Finances dropped, equipment failed, and once again, the mine closed. There were a few more sniffs from other operators but the mine was dormant until 2009 when CVG Mining Ltd. took over the property and set to work compiling historic data and testing the property. In 2012, Omineca announced a reverse takeover
(RTO) of CVG, with the Wingdam as the primary asset. That brings us to today. Termuende and Leonard Sinclair, the president and CEO of CVG, are confident that mining technology has evolved to the point where the sunken treasure at Wingdam can finally be recovered
43

(Sinclair is staying on as project manager). They are borrowing the same technology potash mines in Saskatchewan use to sink massive shafts through the Blairmore Foundation of wet clay and sand. At Wingdam, a test-mining operation completed by CVG used freezemining technology to stabilize the unconsolidated gravels and provided CVG with the ability to drive a production drift across the pay channel at depth. Termuende said that CVGs testmining resulted in a bulk sample that recovered 99 per cent of the gold and confirmed both the freeze-mining process and the results of historic sampling and limited production. These are historically very high grades, said Termuende, the kinds of grades they were getting in the original rush of the 1860s. You dont get those anymoreand those extreme high grades are still intact at Wingdam. Sinclair also believes that the timing is on their side this time. The exciting part of this test-mining project was the opportunity to overcome the history of failures that had surrounded the project for about 116 years, said Sinclair. Of course, it is gratifying to think that we overcame significant issues that may have stopped others . . . Anyone who has lived with a project knows that certain factors need to be in place to be successful; fortunately, the factors of good financing, a good lawyer, a good accountant, good consultants, a hardworking crew, a bit of luckand the support of my wifecame together to make this project what it is. The official reporting on the reserves is yet to be completed, but Termuende said the economics of the project are potentially very robustand the math is intriguing: the CVG tunnel, which was approximately 2.4 metres in width and 23 metres in length, yielded 4,704 grams (173 ounces) of gold; if this holds true for the two-plus kilometres of un-mined stream channel, the yields could be around 4.2 million to 5.6 million grams. Buried treasure, indeed. What makes this project even more appealing are the bottom-line figures. It has very affordable startup costs of approximately $10 million, and no milling, leaching or tailings facilities are needed. Recoveries are approximately 99 per cent, and the operation can run year-round. A placer mining permit is already in place and is currently being amended to accommodate freeze mining production. Investors are showing keen interest in the project. Termuende believes that even in a very challenging marketand with golds recent nosedivethe project will pan out. I firmly believe in the rising price of gold, said Termuende with a grin. The great thing is that we can wait until the price of gold is right and markets are supportive to begin operations since it is essentially a turnkey operation. It can sit idle until the conditions are right. Its really an incredible hedge on gold in the future. CMJ
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Rescue
To the
Grand clean-up plans present new opportunities for old site
By Eastern Correspondent DArcy Jenish
he Town of Snow Lake, Man., population 900, bills itself as a place of breathtaking scenery, pristine lakes, untapped resources and friendly people. Gold was discovered in the area in 1925 and mining has always been the economic mainstay of the remote community, which is located some 685 km north of Winnipeg, and roughly equidistant between Flin Flon and Thompson. The Howe Sound Mining Company operated the Nor Acme Mine on the outskirts of Snow Lake from 1949 to 1958 and it left behind an enduring reminder of its presence--a massive stockpile of arsenic-laden rubble about the size of a football field and 20 to 30 feet high. Along with arsenic and other toxic contaminants, some of which have oozed into nearby waterways, the 265,000-tonne stockpile also contains a lot of gold--some 9.7 grams per tonne, according to Toronto-based BacTech Environmental Corp. The company is currently attempting to raise $25 million in order to build North Americas first commercial environmental bioleaching facility to extract the gold--along with smaller amounts of silver. In the process, BacTech will be relieving the Manitoba government of a major environmental problem by cleaning up the stockpile at no cost to the taxpayer, as company president and CEO Ross Orr puts it. BacTech was able to sell the provincial Department of Innovation, Energy and Mines on its proprietary BACOX bioleaching technology, which is capable of freeing base and precious metals from sulfides while rendering inert the toxic byproducts of mining operations. We kept badgering and badgering them until we got in to see Minister of Mines Dave Chomiak, says Orr. We said: We want to clean up the mess at Snow Lake.
The BacTech team at Snow Lake include (left to right) Gary Williams, P. Geo, Environmental Consultant, Ross Orr, President and CEO, and Dr. Paul Miller, Vice-president, Technology.
He said: Whats it going to cost me? I said: Nothing. Were going to do it because we think theres enough value there in the gold to pay for the operation and provide ourselves with a decent return. He took two days to sign off on it. The department granted BacTech permission to remediate the stockpile in April, 2011 and since then the company has been developing plans to build a processing plant, seeking environmental approvals for it and attempting to raise money necessary to build it, which hasnt been easy, concedes Orr, given current market conditions. But he and his management team have developed a novel concept that he is calling the Green Gold Alliance. They are trying to persuade large gold producers, as well as the jewellery industry and other users of gold, to put money into the project. Were going after companies with skin in the game, he says. Im trying to convince the big companies, some of which are sitting on $1 billion cash, to give us $2 million at six per cent and join our alliance to build this facility. This technology will become the answer to some of the industrys environmental challenges as opposed to capping and treating. Thats just a band-aid. Bioleaching is a proven technology though hitherto it has been used only in working mines. According to Orr, tailings are delivered to a flotation plant, which separates rock from sulfide minAugust 2013 Canadian Mining Journal |
47

erals and metals. Afterward, the rock goes back to the tailings pile and the concentrate goes to bio-leach tanks loaded with sulphur-loving bacteria. Over the course of several days, these microscopic creatures consume the sulphur, thus freeing the locked up gold and silver, as well as iron, arsenic and other contaminants. They leave behind a slurry containing solid silver and gold, as well as a liquid containing dissolved iron, arsenic and other metals. The slurry is pumped to another part of the facility that seperates solids from liquids. The solids (gold and silver) are then moved to a metals recovery plant. The liquids, meanwhile, are piped to neutralization tanks where limestone is added to produce several non-toxic byproducts such as gypsum and ferric arsenate and these are returned to the tailings pile. South Africa-based precious metals producer Gold Fields began developing bioleaching technology in the late 1970s and since 1986 has built commercial and demonstration plants using its proprietary BIOX process. BacTech and its predecessor companies developed a proprietary variation called BACOX and since 1994 it has been licensed for use in operating mines in Western Australia, Tasmania and China. There was one problem with merely licensing the technology, as Orr explains. In the mid-2000s we realized that the only people making money from the technology were the people licensing it from us, he says. We were solving the problems of other companies by turning unminable deposits into mineable deposits. We were getting a $2 million fee and a pat on the back. In 2005-06, (under dirrecent management) BacTech Mining, as it was then known, acquired the rights to a Nevada property known as Tonkin Springs, south of Barrick Golds Cortez mine and attempted to use its bioleach process to unlock the gold contained in a very complex refractory deposit. The venture failed and nearly bankrupted BacTech. After being refinanced and restructured, the company reemerged in 2010 as BacTech Environmental. And it had a new mission after Orr and the rest of his management team experienced a proverbial eureka moment. We were sitting around one day and we said theres got to be good value in tailings due to increased metal prices, says Orr. You can accept a lower grade because all the heavy lifting has been done. You dont have to sink shafts and develop a mine. We Googled arsenic problems and mine tailings and came up with lots of entries, including Snow Lake. BacTechs proposed bioleach plant would be capable of processing 100 tonnes of concentrate a day or about 40,000 tonnes per year. Orr says that will yield 11,000 ounces of gold annually at a cost of $750 an ounce. The Snow Lake stockpile will keep the plant supplied for about seven years, but the company hopes to locate other supplies of tailings in northern Manitoba that can be likewise processed and would, therefore, extend the life of the plant to about 20 years. CMJ
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| Company Profile RDH Mining Equipment
Simply
By Russell Noble
Solid
Small-town manufacturer takes on the biggest projects thanks to confidence in its equipment
Machines manufactured by RDH Mining Equipment of Alban, ON. can be found on huge projects around the world.
51
| Company Profile RDH Mining Equipment
The companys blue-and-yellow equipment in action.
The proud staff of RDH Mining Equipment pose with some of the products they make at their facility in Alban, ON.
R
Underground work showing a piece of RDH equipment in action.
A new machine is put to work on the companys on-site 20 per cent test slope.
DH Mining Equipment is a smalltown company with a worldclass attitude and a global vision. Its roots are planted on a hilltop in the Town of Alban, Ontario (Pop. 1,200) but its branches spread across the country and its products can be found around the world. Located just off Highway 69 about 40 minutes south of Sudbury, the company has grown from a rustic machine shop operation known for rebuilding and remanufacturing local mobile underground mining equipment to now, almost 30 years later, into an OEM with a wide range of underground machines and moreover, international buyers. However, unlike many equipment manufacturers with such a widespread reputation, RDH Mining Equipment has remained relatively low key and loyal to its community by still occupying the 32-acre site where everything started back in 1984. In fact, the only sign that the company exists on the hilltop behind a small forest of trees is a modest double steel gate with the letters RDH welded into its design. Its once you get through those gates, however, is when and where the company really starts to show off its colours as visitors are greeted by a selection of gleaming blue and yellow machines perched on the
52 | Canadian Mining Journal August 2013 www.canadianminingjournal.com
hill leading up to the main yard and manufacturing and administrative facilities. As mentioned earlier, RDH Mining Equipment is somewhat low key and the positioning of those machines on a steep grade at the entrance is just one of the subtle examples of how the company lets the quality of its products do the talking. An adjacent 20 per cent test slope, designed with the help of engineers from Vale, provides visitors with more proof that the machines manufactured by the company are up to the task of hauling heavy loads up and down severe slopes. Its a simple way of proving a point and as the companys motto says, Simplifying Heavy Equipment is what RDH Mining Equipment is all about. Company President Kevin Fitzsimmons says the test slope is always a popular attraction at the site but whats going on in the various buildings is where the real action takes place. All of our equipment is designed and manufactured in-house. From our engineering department, through parts assembly and testing, almost everything is done here, says Fitzsimmons. Its truly Made in Canada but when it comes to where the equipment ends up, its a global product because over the years we have built an international client base which includes but is not limited to Russia, Africa, Ecuador, France, Chile, Peru, Mexico and naturally, the United States. RDH Mining Equipment employs 55 people on two shifts who, according to Fitzsimmons, can adapt to quick changes and modifications to customized orders from clients in niche markets. Because of our size and every technicians familiarity with all of our products, we can fill orders far quicker than many other manufacturers and furthermore, because our workforce is all from the surrounding community, we also know that they are readily available to solve problems at almost a moments notice, said Fitzsimmons. That said, Fitzsimmons continued by emphasizing that because of the simplicity of the equipments design, customers can also feel comfortable knowing that once they have the equipment on site, the simple and tough designs make them easier and less costly to maintain and repair. CMJ

An aerial view of the RDH Mining Equipment hilltop site where the company has been located for almost 30 years.
53
| Products
Seeing driving system monitors operators
Caterpillar Global Mining has entered into an alliance agreement with Seeing Machines Limited of Canberra, Australia, to deliver and support operator fatigue monitoring technology through Cat dealers. Seeing Machines has developed fatigue monitoring systems using patented eye and head tracking technology to detect operator fatigue and distraction, and to alert the mine controller and the machine operator. Seeing Machines Driver Safety System (DSS), a commercial system for mining trucks, currently is working on more than 20 mine sites and 1,500 vehicles. The system continuously measures operator eye and eyelid behaviour to determine the onset of fatigue and micro sleeps and delivers real-time detection and alerts, yet the operator is not required to wear any special equipment. Additionally, automatic initialization and calibration of the dash-mounted camera requires no input from the operator. As a result, the system is transparent to the operator. Caterpillar Global Mining announces the development of its shearer model, the EL 1000, designed specifically for low- and mediumheight seams. Preliminary specifications for the EL 1000 shearer indicate that the new
Longwall Shearer
model will accommodate seam heights from 63 to 126 inches (1.6 to 3.2 m), will deliver an estimated cutting power of 1,600 horsepower (1 000 kW), and will provide haulage power on the order of 2 x 134 horsepower (2 x 100 kW). Reflecting the basic design of other proven Cat longwall shearers, the EL 1000 will feature onepiece-mainframe construction, exchangeable modular components, advanced automation,
and Ethernet communication. Designed with the Cat PMC-R electrohydraulic roof-support control system built in to identify the presence of personnel in longwall faces through RFID (Radio Frequency Identification), the Detect Personnel system avoids contact between personnel and moving equipment by monitoring safety zones and access authorization.
Water Tanks
Specifically developed with a safety focus, Philippi-Hagenbuchs (PHIL) line of water tanks provide a unique design that optimizes capacity and enhances travel safety. Built for any make or model of off-highway truck, the HiVol water tank series serves as an ideal solution for a multitude of applications, including dust suppression, fire protection, road construction and wash down. Unlike traditional water tanks, which typically utilize only 80 per cent of the trucks capacity, these tanks are engineered to maximize the trucks capabilities. Building on its tradition of developing products that enhance productivity while minimizing maintenance and increasing safety, the manufacturer calculated the dynamic centre of gravity of the fluid within the tank to engineer the tanks with the lowest weight and greatest carrying capacity. This cab component controls ensure precise yet simpli- The remote controlled water cannon enables the capacity can range up to 60,000 gallons more than fied water control. Horizontal spray heads operate operator to disperse water with precise control and half the capacity of a water tower. independently, allowing users to utilize any or all accuracy from 150 to 200 feet away. This allows Rear-mounted spray heads, an optional re- spray heads at the same time and offer multiple operation from inside the cab or externally while mote controlled water cannon and individual in- settings from wide to narrow for added versatility. roaming within a quarter mile of the vehicle. 54 | Canadian Mining Journal August 2013 www.canadianminingjournal.com
Osler, Hoskin & Harcourt LLP
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| Products
Rear Dumper
For the first time in its long history of innovating rear eject technologies for truck bodies, Philippi-Hagenbuch, Inc. has developed a body specifically for haul trucks that will never be used above ground. The companys new heavy-duty rear eject bodies are specifically designed for underground applications, such as mining, which require equipment that can take a beating, operate in low clearance environments and handle multiple types of loads. The rear eject technology provides a constantly low centre of gravity that allows operators to use their haul trucks in ways that were not previously possible. For example, rear-eject bodies can discharge material on the fly for quick spreading and grading. Operators also can dump loads uphill when backed up to an incline because the ejector blade effortlessly pushes the load out of the back of the truck. The design incorporates minimal hydraulics, resulting in less truck body maintenance. In addition, automatic tailgates lower mechanically with the movement of the ejector blade, and the roller-free system provides a simple, self-centering ejector blade that doesnt require ongoing lubrication.
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Mining Solutions
Weir Minerals is launching its Enduron line of comminution equipment, including crushers, screens and feeders for the mining, sand and aggregate industries. The Enduron range expands the companys comminution solutions portfolio, adding to its range of mill circuit products. With an emphasis on enhancing mining productivity and safety, the new equipment is designed to maximize customers operational efficiency. The Enduron line of products will be sold and serviced through Weir Minerals existing global teams and create a platform for further expansion into the crushing and screening market. Headquartered in Melbourne, Australia, and with facilities on six continents, Weir Minerals delivers end-to-end solutions for all mining, transportation, milling, processing, and waste water management activities.
Fabric Building
Legacy Building Solutions offers a new line of fabric buildings designed with structural steel beams instead of open-web trusses. This new engineering concept provides a higher level of flexibility for vehicle maintenance shops, portable or stationary soil remediation facilities, storage buildings for equipment or bulk material, and other fabric structures used in mining operations. The buildings utilize a rigid frame in place of the hollow-tube, open web truss framing traditionally used for fabric buildings. Unlike hollow tube steel, the buildings solid structural steel beams are not vulnerable to unseen corrosion originating inside a tube. Additionally, the structural steel has multiple coating options, including hot dip galvanizing, red oxide primer and powder coat paint. The strength of the structural steel frame provides several engineering advantages, including the ability to relocate buildings by towing or crane. The rigid frame also delivers the flexibility to customize buildings beyond the confines of standard shapes and sizes to the exact width, length and height required. Legacys straight sidewall design allows for the inclusion of a variety of overhead doors, exit doors and dormers along the sides. Structures can be modified to provide desired eave extensions and interior columns. They also can be engineered to carry ancillary systems that need to be suspended, including overhead cranes, fire suppression systems, ventilation and lighting.
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57
| Products
Mobile Crusher
Sound reasons to choose our equipment.

In case you havent heard, DOOSAN Portable Powers rigorous testing and Tier 4 technology ensures that our equipment meets the highest standards of durability and efficiency, including EPA sound regulations. In the most demanding and complex settings across the world, from the quiet chaos of a golf tournament to the intense operations of an oil well, Doosan Portable Power's generators keep you up and running. If youre looking for ingenuity, innovation and steadfast customer service, give us a shout.
DoosanPortablePower.com | 800.727.8457 2013 Doosan Infracore Portable Power
IROCK Crushers is pleased to introduce its WJC-2644 mobile wheeled crusher designed for processing hard rock, recycled concrete, sand and gravel, and slag. Powered by a 350-horsepower Caterpillar Tier 3 engine, the unit can produce up to 370 TPH through a 10.5 cubic yards hopper. The crusher is equipped with a 48-inch by 36-foot discharge belt and features a fixed discharge height of 11 feet. Further, the rigs stockpiling capability enables users to pair the machine with screening units, which commonly have feeding heights of up to 10 feet. A hydraulic adjusting chamber allows operators to adjust crushing size from a twoinch minimum closed side setting to a six-inch maximum side setting. This allows the unit to produce a top size ranging from two to six inches. The machine includes a 24-inch-wide grizzly bypass conveyor with an adjustable flop gate, as well as a 40-inch by 14-foot feeder with a five-foot grizzly bar section. These features ensure that material, depending on its size, is properly classified and directed to either the side discharge conveyor or the crusher discharge conveyor. In addition, the WJC-2644 is constructed with heavy-duty components for durability and is also designed to allow for easy maintenance. Components of the crusher are open and easily accessible for ease of lubrication, part replacements or other maintenance. For added convenience, standard catwalks and ladders provide easy access. For easy transport of the entire plant, the wheeled crusher features radial tires mounted under a 24-inch beam chassis. The unit features quad-axle rear ride suspension and includes a fifth wheel pin. For quick setup, it is equipped with four hydraulic outriggers for off-loading and leveling the plant.
Rexnords newest gear drive, the Falk V-Class, is engineered to deliver power, durability and reliability under the toughest conditions. Its unprecedented design and test procedures mean longer seal life, improved thermal performance and increased operating life. The Falk V-Class gear drive provides shorter lead times, convenient serviceability and faster, easy access support. And, you can find the Rexnord Falk V-Class at your local Motion Canada location. Our local sales and service specialists are experts in application and technical support, providing the parts and the know-how you need to stay up and running. The brands you count on from the people you trustthats Rexnord and Motion Canada.
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CSR and Mining
Defining what CSR is worth to miners

Marketa Evans is the Government of Canadas Extractive Sector CSR Counsellor. The CSR Counsellor is a special advisor to the Minister of International Trade. The Counsellor has no policymaking role and does not represent Government of Canada policy positions.
By Marketa D. Evans
orporate Social Responsibility: whats it worth? Many companies struggle to define the financial value of CSR initiatives whats the right mix of initiatives? What would the financial return be? How do you prioritize what you do? Should one major community investment project trump the training of 10 local community members to enable them to provide skilled labour? A relatively new, freely available tool can help managers answer these kinds of questions. The Financial Valuation tool FV tool is the product of a multi-year collaborative effort between Deloitte, the International Finance Corporation, Rio Tinto, MIGA and the Norwegian Ministry of Foreign Affairs. We heard about it recently at one of the regularly scheduled Learning Partnership events the Office organizes with the Ryerson Institute for Corporate Social Responsibility. According to the presentation I attended, the tool allows managers to value [sustainability] investments both from a direct cash flow and indirect risk mitigation perceptive. So whats the background? The FV tool was specifically designed for extractive industries, which were among the first to recognize that sustainability investments bring significant value. During its pilot years, the tool was field tested by four different companies, in very different geographic locations. The FV tool can help companies quantify the financial benefits of different forms and approaches to community investment projects. The tool is designed to help managers address two critical questions: what is the right portfolio of community investments? what is the financial return they will likely bring? In 2008, construction of the tool got underway, and while it is still a living process and is subject to changes, those 3 years of field testing yielded further insights both into how the tool could be improved and also into some surprising benefits. The field testing seems to indicate that the tools methodology can be useful for managers to better understand, quantify and maximize the value of their sustainability efforts. In essence the FV tool generates a net present value of a sustainability initiative and allows companies to model different
alternative scenarios for investments that either reduce risks or enhance value directly. Value protection is indirect, and typically tied to risk mitigation the value, in other words, of avoiding delays, disruptions and lawsuits. Value creation, more direct, results from input savings, productivity increases and so on. The FV tool measures both. The tool identifies six common project level risks that can impact value:
Added costs Production disruption Planning/permitting delays Construction delays Lawsuits/regulatory fines Project cancellation
It allows companies to generate scenarios, and quantify financial impacts, of both indirect value value protection- afforded by proactive community investments as well as direct value creation. But according to those companies who have tried it, the process of cross-corporate engagement that the FV tool generates is as valuable as the outputs it creates. The process brings together traditionally silo-ed corporate activities of stakeholder engagement, qualitative risk assessment, strategic planning and budgeting. This was found to drive company benefits as well. According to one of the pilots from the mining sector, the FV tool can be used to assist non-finance functions to improve understanding of a community investment connection to financial drivers. It may also help, according to this individual, with a more concrete business case for community investment. The tool is a public good, downloadable for all, and comes with a series of support manuals and an on-line tutorial www.fvtool.com CMJ As always, we invite you to contact us and learn more. Or, if you have CSR related questions, feel free to drop us a line: email: csr-counsellor@international.gc.ca
Professional Directory
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AEL Mining Services................................................... 8...............................www.aelminingservices.com Banco Base................................................................ 38........................................... www.bancobase.com BBA................................................................................ 7............................................................www.bba.ca B.I.D ............................................................................. 61........................................www.bidcanadaltd.com CG Industrial Specialists............................................ 4........................................................... www.cgis.ca DMC Mining Services............................................... 56............................................www.dmcmining.com Doosan Portable Power............................................ 58.......................www.DoosanPortablePower.com Dundee Capital Markets........................................... 64......................................www.dundeewealth.com Eco Waste Solutions................................................. 61........................................ www.ecosolutions.com Ford Motor Canada.................................................... 27.................................. www.ford.ca/WeOwnWork Gea Westfalia Separator Canada Division............ 25..........................................www.gea-westfalia.ca Gold Corp..................................................................... 14................................ www.goldcorp.com/careers Golder Associates..................................................... 42.................................................... www.golder.com Grieve............................................................................. 7............................................www.grievecorp.com Haulmax....................................................................... 36................................................ www.haulmax.com InfoMine Inc............................................................... 61..................................www.conferencemine.com Industrial Equipment Mfg......................................... 37............................................................ www.iem.ca Infosat.......................................................................... 20................................................... www.infosat.com Kubota Canada Ltd.................................................... 45.......................................www.kubotaengine.com Luff Industries.............................................................12.......................................www.luffindustries.com Martin Engineering....................................................39.......................................... www.martin-eng.com Mechanix Wear..........................................................11.......................................www.mechanixwear.ca Motion Industries ......................................................59............................... www.MotionIndustries.com NUNA Logistics..........................................................35...................................... www.nunalogistics.com Orica.............................................................................49..........................www.oricaminingservices.com Osler, Hoskin & Halcourt..........................................55..................................................... www.osler.com Petro Canada................................................................2.........www.lubricants.petro-canada.ca mining Polydeck Screen Corporation...................................9.................... www.polydeckscreen.com/mining S.Huot..........................................................................53.................................................... www.shuot.com SpinTek........................................................................43................................................. www.spintek.com Sprung.........................................................................24.................................... www.sprung.com/mining SRK...............................................................................53.........................................................www.srk.com Stantec........................................................................19................................... www.stantec.com/mining Strongco......................................................................44.............................................. www.strongco.com Superior Propane.......................................................63................................ www.superiorpropane.com Technosub...................................................................57............................................. www.technosub.net Tetra Tech Industries................................................58............................www.tetratechindustries.com United Rentals............................................................13...................................... www.unitedrentals.com Valard...........................................................................48...................................................www.valard.com Volvo Construction Equipment................................21.............................................. www.strongco.com Weir Minerals.............................................................17.......................................www.weirminerals.com
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Unearthing Trends
Finding opportunities as headwinds continue

Jay Patel is a partner at EY and the firms Canadian mining and metals transactions leader. He is based in Toronto.
By Jay Patel
eadwinds felt in the first quarter of the year continued in the second quarter and challenged Canadian mining and metals companies. Losses captured on the TSX and TSXV in the first six months of the year show Canadian mining equities are continuing to significantly underperform as concerns around global economic growth expectations and commodity prices take their toll. EYs Canadian Mining Eye index which tracks the performance of 100 TSX and TSXV mid-tier and junior mining companies fell 13% in Q1 2013 and a further 34% in Q2 2013. This stands in stark contrast to the 3% gain in the S&P/ TSX Composite Index in Q1 2013, and the much smaller 5% loss in Q2. And while juniors have felt recent global mining and metals challenges, including the ongoing capital strike, more severely than their larger competitors, majors started to experience a similar downward movement, declining 11% in Q1 2013 and 25% in Q2 2013. Forces at play A number of factors have impacted the severity of the decline over the last few months. Gold prices witnessed a historic fall in April with concerns that the Cyprus Government and a few other European countries might sell their gold reserves to raise cash. In June, gold prices dipped further with talks of quantitative easing
tapering as early as fall of this year and inflation nowhere on the horizon. Since then, US Federal Reserve Chairman Ben Bernanke has stated that highly accommodative monetary policy will be needed to support the US economy. This has stabilized gold prices, albeit at levels much lower than at the end of 2012. Uncertainty remains, with some predicting further price declines. These growing concerns are translating into a challenging market for capital access as investors become more risk averse. Persistent challenges around financing conditions on the global equity markets, slowing deal execution due to valuation gap, and resource nationalism are also having a distinct impact on companies ability to do deals and meet their growth agendas. Weathering the storm Constrained access to capital markets and cost escalations arent making it easy for Canadian mining and metals companies to stay on track. But opportunities continue to exist for those willing to take a long-term view of the sector. Its about balancing cost reduction and operational efficiency efforts with strategic transactions. Canadian companies took the following measures over the course of the first half of the year and are set to continue over the next two quarters: Cost containment and streamlining
operations: Many of the majors have explicitly curtailed or cut costs and streamlined operations to meet their nearterm organizational needs. Non-core asset disposal: Some companies announced disposal of non-core assets to raise cash and focus strategically on their core business. Strategic acquisitions: A number of companies are doing strategic deals to sustain growth and expand inorganically. Non-traditional financing: Innovative forms of financing are one way many companies are avoiding equity dilution, especially juniors actively seeking new sources of financing to raise capital, including equipment financing, streaming and private equity investments. Those who are able to access debt markets are capitalizing on available liquidity to refinance debt and access relatively cheaper capital. Capital recycling: Many companies are considering divestments of non-core or non-strategic assets to raise cash and focus more strategically on their core business. While the sector will continue to face headwinds, Canadian companies will continue to seek opportunities to focus on shareholder expectations by focusing on costs and profitable growth opportunities. As the sector continues to face volatility in equity prices, it will remain critical for companies to align the long-term nature of mining projects with shareholder expectations. CMJ
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Were not a bank. Were miners and geologists with money to invest.
We are Dundee Capital Markets and we offer you a full service investment dealer whose principal business includes investment banking, institutional sales and trading, private client advisory, and investment management. We have the capital to assist the development of large - or small - scale resource ventures and the experience to spot good potential much earlier than others. We are looking for smart investments, big and small, in the global resource sector and have the resource industry expertise and the balance sheet to help your company when you need it most. Others invest only when youve proven yourself; we invest so you can. If this sounds like a group youd like to do business with, talk to me. My name is Ned Goodman.
nedgoodman@dundeecorporation.com 416-365-5665

Canadian Mining Journal August 2013

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When the world looks to you

Call 1-866-335-3369 or visit lubricants.petro-canada.ca/mining

Petro-Canada is a Suncor Energy business

Trademark of Suncor Energy Inc. Used under licence.

Canadian Mining Journal

Niagara Tunnel Job

This months featured company is RDH Mining Equipment of Alban, Ontario.

60 CSR and Mining

Exploration and Development

32 Sites & Solutions

CANADIAN Mining Journal

For More Information

CG IS the severe service valve expert

Nothing is more challenging than managing severe service valve applications.

Visit www.cgis.ca and discover the power of expertise.

Canadian Mining Journal

When IR means Inventory Reduction

6 | Canadian Mining Journal August 2013

For(e) hard-core golfers only

OVENS AND FURNACES FOR EVERY INDUSTRY

One little click...one BIG website!

A101768 AEL IRON 178x254 CMJ fa.pdf

Economist Pippa says Buy Gold Now and I agree

 Gold bulls have a rare chance to double up now.

Negotiating development agreements in tough times

Performance. Visibility. Protection.

Current trends make it wise to invest in community relations

IDLERS | PULLEYS | IMPACT BEDS | ACCESSORIES

QUALITY. SERVICE. DEPENDABILITY.

Luff Industries Ltd.

12 | Canadian Mining Journal August 2013

Because theres no time for downtime.

2013 United Rentals, Inc.

| Canadas Top 40 Miners

Little change among the top performers

| Canadas Top 40 Miners

Canadas Top 40 by Gross Revenue

16 | Canadian Mining Journal August 2013

The Runners-up (C$ millions)

Silver Standard Resources

80,128 26,974 43,931 15,661 49,644 8,701 (36,662)

1,276,102 994,732 418,586 249,029 609,259 205,329 628,533

42 Taseko Mines 43 Aurizon Mines 44 Endeavour Silver 45 Primero Mining

Amerigo Re46 sources Gran Colombia 47 Gold

176,859 3,179,079 19,533 (65,154) 271,641 416,045

North American 50 Palladium

A future where GEHO pumps ensure you a dry mine

August 2013 Canadian Mining Journal |

| Canadas Top 40 Miners

Top Revenue Gainers

Top Earnings Gainers

Gold Base metals Gold Potash Gold Potash

78,424 1,869,400 117,972 3,081,000 199,000 1,498,000

17,997 654,800 60,333 1,775,000 179,000 1,375,000

+435.8% +285.5% +95.5% +63.8% +11.1% +8.9%

Who is eligible for the Top 40?

18 | Canadian Mining Journal August 2013

Top Earners (C$ millions)

August 2013 Canadian Mining Journal |

| Canadas Top 40 Miners

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Top Asset Holders(C$ millions)

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