Feds pledge to improve ice roads
Mine operators in the Far North who rely on old man winter for transportation routes have gained a new ally. Prime Minister Stephen Harper announced in August the launch of a federally funded project dedicated to improving the safety and performance of northern ice roads. The project is part of the new Arctic program led by the National Research Council (NRC).
The ice road project will focus on how to maximize the use of ice roads often employed by mining companies to transport goods from northern sites. Currently, ice roads are open from one to three months depending on where the road is located, said Arctic program leader Anne Barker.
She added that the project could take various forms such as strategic research and development or technical services that provide solutions to specific problems brought forth by mining companies.
The Arctic program as a whole will carry out work on resource development, northern transportation, marine safety and community infrastructure. “Overall, the point of the program is to ensure that if there’s resource development in the Arctic, that it occurs in a safe and environmentally responsible manner,” Barker explained. The program will cost the federal government $17 million over eight years. They are looking for a further $65 million in investments from industry partners.
Work started on the ice road project in August to figure out users’ needs. “We’ve had conversations with industry partners involved in the area,” said Barker. “We’re working toward an end-user discussion.”
“I’m very excited by the program,” she said. “It’s great to have a defined focus.” According to Barker, the ice road project alone is expected to take up to five years.
The Arctic program was created in the recent restructuring of the NRC, which involved concentrating the organization’s efforts on industrial research instead of basic science.
True Gold receives funds for Karma project
Vancouver-based True Gold secured up to $120 million in August to finance its Karma gold project in Burkina Faso.
The company announced August 11 it had entered into a US$100-million streaming agreement with Franco-Nevada and Sandstorm. True Gold has the option of increasing its funding by as much as $20 million in the next 18 months. Now that True Gold has access to this capital, said Alex Holmes, vice-president of business development, the Karma project is fully funded. “The package with Franco and Sandstorm, together with our equity on hand, gets us fully financed with a contingency built in to the end of the next year,” he said.
Holmes said that since September, True Gold has started pouring the concrete for the plant foundation, and equipment continues to arrive. “[We’re] pre-stripping, adding some additional haul roads as well as moving more significant amounts of material around,” he explained. Up to this point, the company had prepared the site for the foundation of the processing plant and the ADR plant. It also improved road access in and around the mine site and built the mine’s water supply.
According to Holmes, construction will be completed by the fourth quarter of 2015 and production will start at the end of that year.
The Karma project is an open pit, heap leach gold mine in West Africa. The project, which has an estimated mine life of eight and a half years, is expected to yield 97,000 ounces of gold annually.
Growing support for Movember
While the autumn months are known for the change in foliage, November has recently become known for a different annual metamorphosis. Normally clean-shaven men put their razors aside for the month to grow moustaches as part of Movember to raise awareness for men’s health issues such as prostate cancer, testicular cancer and mental health.
In 2012, the Canadian mining industry took up the gauntlet of men’s health. “Mo Bros” and “Mo Sistas,” as the men and women involved in Movember are known, decided to formalize their involvement in the campaign and established the Great Canadian Mining Challenge. The now annual event is a friendly competition within the industry where men form corporate teams and pledge to grow a moustache while raising money for the cause, competing with teams from other mining companies. One of the leaders of the effort to create the challenge was Matt Rosales, a geologist and GIS analyst at Teck. “He was kind of the one within the industry who championed the effort,” said Jeff Lohnes, business engagement manager at Movember.
Last year, 484 members across 36 corporate teams helped raise more than $190,000. Aurico Gold raised $15,800, the most by any single team. Employees at Teck Resources formed 20 separate teams and collectively raised more than $56,000. “[It was an] absolutely amazing effort by employees at both companies,” said Lohnes.
He added the importance of Movember goes beyond the challenge, however. “Our real focus is around raising awareness with the campaign,” he explained. “We’re always looking to make sure that more and more men have access to information around men’s health. Some of the successes we’re really seeing are where companies start to adopt better internal health practices and internal screens for different issues.”
Seabridge receives B.C. approval for KSM
Seabridge Gold’s KSM project, one of the world’s largest undeveloped gold and copper reserves, received final approval from the government of British
Columbia in July for an Environmental Assessment Certificate. Only one other mine in the province has received the certificate in the last five years.
Seabridge, whose other principal asset is the Courageous Lake gold project in the Northwest Territories, spent close to seven years and more than $176
million in exploration, engineering and environmental work leading to the approval for KSM in northern B.C. The KSM project has a 52-year mine life and an
estimated 38.2 million ounces of gold, 9.9 billion pounds of copper, 191 million ounces of silver and 213 million pounds of molybdenum.
“We had more than 30 group sessions with all the aboriginal groups, federal and provincial regulators, and Alaskan regulators,” said Rudi Fronk, the
company’s CEO. “We’ve listened to their feedback and pushback and made significant design changes.”
These modifications added $500 million and brought the estimated construction cost up to $5.3 billion. They include adding a liner to the centre cell of
the tailing management facility to minimize the potential for downstream effects on wildlife and fisheries, re-designing the tailings management facility
to have a different discharge point and relocating the mine’s access road to minimize the potential for effects on fisheries and wildlife.
The company recently received more good news. While awaiting federal approval of KSM from the Canadian Environmental Assessment Agency, which is the next
step in the process, Seabridge confirmed in early September another major new gold and copper occurrence at KSM. It is now intensifying its drilling
program in order to collect the data needed to develop an updated resource estimate by January.
“We’re doing all the de-risking,” said Fronk. “Our goal now is to have a joint venture in place by the end of first quarter 2015.”
Ring of Fire development corporation announced
In late-August, within 60 days of taking office, the Ontario Liberal Party made good on its $1-billion promise to kick-start a development corporation
(known as Devco) for the Ring of Fire region in northwestern Ontario.
With its headquarters in Thunder Bay, 540 kilometres south of the massive chromite, copper and nickel district worth an estimated $60 billion or more,
Devco’s first task will be to develop an agreement between government, industry and local First Nations on how all groups will participate in the
organization. In time, Devco could dictate the type and location of infrastructure leading into the remote region.
The Ontario Liberals have appointed an interim four-person board of directors to oversee this first stage of Devco. The board currently consists of
assistant deputy ministers from Cabinet Office, the Ministry of Transportation and the Ministry of Northern Development and Mines. The executive
vice-president of Infrastructure Ontario also sits on the board, while the assistant deputy minister from the Ministry of Aboriginal Affairs will be added
to the roster soon.
No formal infrastructure decisions will be made, however, until a larger, “mature” board of directors has been established for Devco with key partners
including the federal government, said Julia Bennett, spokesperson for the ministry of northern development and mines. No timeline has been set for when
the full board will be in place, but once it is, Devco will begin making investment decisions about “strategic transportation infrastructure,” including
how best to spend $1 billion pledged by Premier Kathleen Wynne during the recent election, she said.
Mining Minister Michael Gravelle first promised the creation of Devco in November 2013 to set the tone for how the Ring of Fire could be developed in
co-operation with all interested stakeholders. Consulting firm Deloitte was brought on board in February to create the new entity’s legal and governance
Investors step up for Imperial Metals
Bolstered by a $115-million cash infusion, Imperial Metals is continuing its cleanup efforts of the Mount Polley tailings pond breach and work to complete
its Red Chris mine in northwest B.C.
The bulk of the funding announced in early September came from Edco Capital Corporation, owned by Imperial’s top shareholder, N. Murray Edwards, and The
Fairholme Partnership; each purchased $40 million worth of unsecured convertible debentures.
Steve Robertson, Imperial’s vice-president of corporate affairs, said the money will go towards Mount Polley’s remediation – which analysts have estimated
will cost between $50 million and $500 million – and the construction and commissioning of Red Chris, as well as general corporate purposes. “All of our
money is going to be put to good use on those projects,” he said.
The entrance to the Red Chris gold and copper mine was blockaded by a group of Tahltan First Nations’ members, known as the Klabona Keepers, in response to
the Mount Polley tailings breach in mid-August. It ended after Imperial signed an agreement with the Tahltan on August 26, which will see the company pay
for an outside engineering firm of the Tahltan’s choosing to evaluate the Red Chris tailings facility. Robertson said the evaluation should not get in the
way of the mine’s opening, which is slated for later this year.
BHP Billiton reverses consolidation
BHP Billiton announced in August it would spin off a number of assets that were assembled in the 2001 merger that created the mining giant. The Melbourne,
Australia-based company, which currently operates a global portfolio of 41 assets, will split those operations between BHP Billiton and the as-yet-unnamed
Company documents list “six major operated assets” it will maintain in the coming demerger. These include Western Australia Iron Ore, Queensland Coal, New
South Wales Energy Coal, the Olympic Dam polymetallic mine in Australia, and the Escondida and Pampa Norte copper mines in Chile. The Jansen potash
deposit, BHP Billiton’s key Canadian holding, will also remain under the company’s control. The briefing document states that the demerger “would not alter
BHP Billiton’s position as the […] developer of the world’s best undeveloped potash resource in Saskatchewan.”
Those major operations as well as some select copper, coal and iron projects the company has stakes in but does not operate, represent 95 per cent of its
current earnings before interest, depreciation and taxes.
The spinoff company that will have its own board and management will include the existing aluminum and manganese businesses as well as various base metal
and coal mines in South America, South Africa, and Australia.
Things are looking bright for the future of BHP Billiton, according to Darren Sissons, an analyst with Portfolio Management Corp. He noted the improving
global economy should boost demand for the company’s key minerals in emerging markets, and the Jansen potash business is expected to become an increasingly
important part of the global food value chain.
If shareholders and regulators approve the proposal, the company expects the spinoff to be completed by the first half of 2015.
Vancouver port approves coal transfer facility
Port Metro Vancouver approved a new coal transfer facility at Fraser Surrey Docks on August 21. When completed, up to four million tonnes of coal per year
will pass through the locale, which will join other existing coal transfer infrastructures in the area. These include the West Shore Coal terminal in
Roberts Bank and the Neptune terminal in North Vancouver.
According to John Parker-Jervis, a spokesperson for Port Metro Vancouver, the facility will exclusively handle American thermal coal coming into Canada
through Wyoming by train. Once it reaches Fraser Surrey Docks, it will be loaded onto barges and shipped to Texada Island. From there it will be
transferred to ocean-going liners to be shipped to Asian markets.
“One train a day will be coming into the facility,” says Parker-Jervis. “The coal will be then direct transferred, with no stockpiling permitted on site,
and extra binding agents will be sprayed at the terminal before it is loaded onto the barge, in order to minimize dust.”
Port Metro Vancouver did not provide a timeline for construction of the facility.
The $15-million project, which is expected to create 25 direct and another 25 indirect jobs, was subject to a two-year environmental and public impact
review prior to approval and no significant risks were identified. The company has stated that the facility has the potential to double in size, though
such an expansion would trigger further reviews.
Mt. Polley breach raises uranium tailings safety concerns
Reverberations from the Mount Polley tailings pond breach in British Columbia continue to spread. In August, the Canadian Nuclear Safety Commission (CNSC)
asked licensees of uranium mines and mills with tailings facilities to review safety procedures.
In a letter dated August 14, Ramzi Jammal, the CNSC’s chief regulatory operations officer, requested that seven operators look into the causes of the Mount
Polley tailings breach and confirm they are complying with existing licensing conditions and introducing measures to mitigate breach accidents. The seven
licensees are AREVA, Cameco, Rio Algom, Willet Green Miller, P.J. Bruggar and Associates, EWL Management, and Denison Mines.
According to Mark Drolet, a CNSC spokesperson, the organization is unaware of any past uranium tailings breaches. “With the exception of the radiological
content and specific measures to limit radiation exposure, production of uranium tailings and their long-term management [involves] similar processes and
practices as those [in] other metal mines (i.e. gold, silver, copper),” said Drolet.
CNSC staff will also be conducting inspections of the above-ground tailings management facilities of the seven operators, according to Jammal’s letter. If
any issues arise during the inspections, the CNSC may take further action.
Asset sales could follow Casablanca’s Cliffs takeover
Casablanca Capital, an activist investment firm, announced in late July that six of its nominees were elected to the 11-member board of Cliffs Natural
Resources, giving it effective control of the company.
The new board lost no time in putting its stamp on the business. In early August the slate voted in Lourenco Goncalves as chairman of the board. Goncalves,
who took over from Jim Kirsch, has vowed to “set Cliffs on a course to improve performance and restore shareholder value.”
Initial moves appear focused on financial engineering more than mining. In late August, Cliffs announced a $200-million share repurchase plan that will
boost earnings per share and return cash to investors, rather than reinvesting in operations.
In a statement announcing the buyback, Goncalves said Cliffs’ new strategy will centre on its core U.S. iron ore business.
Asset sales have also been mentioned by analysts as possible future moves. Cliffs’ Canadian properties include the vast but undeveloped chromite deposit in
Ontario’s Ring of Fire, as well as the Wabush and Bloom Lake iron ore operations, both in the Labrador Trough. The idled Wabush operation was already being
shopped around prior to the change in the board and there is the possibility the Bloom Lake operation will be spun off as well.
Recently, other iron ore producers have shed or stalled less-attractive assets. Sweden’s Northland Resources has postponed development of a second
processing line at its Kaunisvaara operation and is shopping around its Hannukainen property. Labrador Iron Mines suspended all of its operations this past
summer, and Australia’s Cairn Hill mine, owned by Termite Resources, was also closed.
Alberta releases new guidelines for consultation with First Nations
The approach to First Nations consultation in Alberta became clearer recently, following the provincial government’s July release of the Guidelines on
Consultation with First Nations on Land and Natural Resource Management to supplement its policy on consultation with First Nations introduced last year.
The new guidelines were created after consulting with industry, First Nations and other stakeholders last October. The guidelines lay out the roles and
responsibilities of project proponents, First Nations and various branches of the government including the Alberta Energy Regulator. The document also
establishes the process for consultation and gives guidance on the level of consultation required depending on the scale of the project. The 2013
consultation policy includes the establishment of the Aboriginal Consultation Office that now acts as the single government authority and overseer for
consultation. The office manages the consultation process, completes pre-consultation assessments and determines consultation adequacy for decisions under
the Alberta Energy Regulator and makes recommendations for Alberta government ministries, said Martin Dupuis, spokesperson for Alberta Aboriginal
“The previous guidelines were ministry-specific, and each ministry had different consultation processes as the Aboriginal Consultation Office was not in
existence,” explained Dupuis. “[They also] did not contain sector-specific consultation matrices.”
Two matrices were included as planning tools for industries. The first is designed to help companies determine whether their activity necessitates
consultation. If it does, the second matrix assists in deciding if that consultation should be streamlined, standard or extensive.
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