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CONTENTS|CONTENUCIM MAGAZINE | JUNE/JULY 2012 | JUIN/JUILLET 2012

NEWS 14 The skinny on Australias fat new tax

Fortescue and others face hikes by V. Heffernan

17 Case closed CSR Counsellors decision helpsclarify role in disputes by V. Heffernan and P. Braul

18 CSR is just the beginning Public-privatepartnerships usher in a new era of developmentby M. Goulet and P. Braul

TOOLS OF THE TRADE 10 Safety Compiled by A. Lopez-Pacheco

COLUMNS 20 In memoriam In loving memory of Paul

Stothart by P. Gratton

21 Supply side CAMESE opens world toCanadian suppliers by J. Baird

22 Eye on business Federal government adjustsmining tax credits by S. Saurez

23 HR Outlook Industry and communitycollaboration helping to foster local employmentopportunities by M. Sturk

24 Standards Standards for Qualified Persons:how to evaluate relevant experience by C. Waldieand J. Whyte

26 Guest column Professional deve lop mentPlan your career (and life) from the perspectiveof your 90-year-old self by J. Martin

34

4 | CIM Magazine | Vol. 7, No. 4

UPFRONT 28 Diverse tacklebox How the Two Bobs shaped HDIs past and future by V. Danielson 30 Efficiencies of (small) scale Why New Brunswick is looking so good this year

by E. Moore

32 Reliability retool Tecks maintenance and reliability program a journey, not adestination by K. Lagowski

34 Mine Training Society perseveres Partners help avert financial crisis despitefunding loss by K. Lagowski

36 Ballad of a semi-working man Equal measures of patience and experiencekeep Terry MacGibbon in business by J. Leuschen

PRELIMINARY PROGRAM75

50

FEATURE |ARTICLE VEDETTE 38 Lodestars Guiding lights for the next generation of women in mining by R. Bergen,

A. Dion-Ortega, A. Lopez-Pacheco and E. Moore

48 R-imaginer lindustrie Attirer les femmes dans le secteur minier : Il fauttravailler en amont par A. Dion-Ortega

PROJECT PROFILE |PROJET EN VEDETTE 50 Gold stars for Hemlo Barricks Hemlo operation sets the pace in sustainable

mining by E. Moore

54 Des toiles dores pour Hemlo Le site Hemlo de Barrick monte lexemple en matire dexploitation minire durable par E. Moore

38

CIM COMMUNITY 56 Custom fit Specialized MBA program sets stage

for future industry leaders by E. Hoffman

57 Cote-Nord Labrador welcomes CMP Newbranch addresses iron ore regions needs by E. Dyck

59 Soar to new heights CIM program elevatesleadership skills by E. Hoffman

Atteinte de nouveaux sommets Unprogramme de l'ICM renforce les comptences enleadership par E. Hoffman

62 CIM Convention brings best, brightestMining innovators collaborate to build industrysfuture by P. Braul, W. K. Chan

Le congrs de ICM rassemble la crme dela crme de la profession Les innovateursminiers collaborent pour btir lavenir du secteurpar P. Braul, W. K. Chan

69 Teaching: the best way to learn M4S gainsmomentum through student outreach by A. Lopez-Pacheco

70 A students perspective Conference perfectchance to learn and network by B. MacEachern

72 All star line-up Meet CIMs new distinguishedlecturers by J. Cyr

Alignment de vedettes Recontre avec les mi-nents confrenciers de lICM par J. Cyr

HISTORIES 80 Historical metallurgy Metallothermic reactions:

a short history (Part 2) by F. Habashi

TECHNICAL ABSTRACTS 83 CIM Journal

IN EVERY ISSUE 6 Editors message 8 Presidents notes / Mot du prsident 58 Calendar 84 Professional directory 86 Mining Lore Boomtown businesswoman: the

wide-ranging career of Nellie Cashman by C. Baldwin

June/July 2012 | 5


editors letter

Editor-in-chief Angela Hamlyn, [email protected]

Managing editor Wah Keung Chan, [email protected]

Senior editor Ryan Bergen, [email protected]

Section editorsFeatures: Ryan Bergen, [email protected] and Upfront: Peter Braul, [email protected], CIM Community, Histories and Technical Section:Dinah Zeldin, [email protected] editor / Communications coordinatorZo Koulouris, [email protected]

Web editor Nathan Hall, [email protected]

Publisher CIM

Contributors Jon Baird, Correy Baldwin, Tanysha Pilgrim Castello,Joelle Cyr, Vivian Danielson, Antoine Dion-Ortega, David Dorken,Elise Dyck, Mireille Goulet, Pierre Gratton, Fathi Habashi, VirginiaHeffernan, Ernest Hoffman, Krystyna Lagowski, Janice Leuschen,Breanna MacEachern, Eavan Moore, Alex Lopez-Pachecho, LaurieAnn Prevost, Karen Rolland, Erik Stout, Mark Stout, Melanie Sturk,Steve Suarez, Julia Martin, Craig Waldie, Jim Whyte

Published 8 times a year by CIM1250 3500 de Maisonneuve Blvd. West Westmount, QC, H3Z 3C1Tel.: 514.939.2710; Fax: 514.939.2714 www.cim.org; Email: [email protected]

Subscriptions Included in CIM membership ($170.00); Non-members (Canada), $220.00/yr (PE, MB, SK, AB, NT, NU,YT add $11.00 GST, BC add $26.40 HST, ON, NB, NL add$28.60 HST, QC add $32.95 GST + PST, NS add $33.00 HST)Non-Members USA and International: US$240.00/year Single copies, $25.00.

Advertising SalesDovetail Communications Inc.30 East Beaver Creek Rd., Ste. 202Richmond Hill, Ontario L4B 1J2Tel.: 905.886.6640; Fax: 905.886.6615; www.dvtail.com National Account Executives 905.886.6641Janet Jeffery, [email protected], ext. 329Neal Young, [email protected], ext. 325

This months coverShear Diamonds CEO Julie LassondeDavid Dorken/dwdorken.com

Layout and design by Cl Communications Inc.www.clocommunications.com

Copyright2012. All rights reserved. ISSN 1718-4177. Publications Mail No. 09786. Postage paid at CPA Saint-Laurent, QC. Dpt lgal: Bibliothque nationale du Qubec.The Institute, as a body, is not responsible for statements made or opinions advanced either in articles or in any discussion appearing in its publications.

Printed in Canada

Leadership and lossAfter spending nearly a week in Edmonton at the

recent 2012 CIM Convention, I returned to theoffice charged up by the quantity and the quality ofthe exchanges I had. I think other members of theeditorial team who had the good fortune to be therewould agree: the event was a great opportunity tosound out ideas and rich terrain for developing newones. The conversations we had will help seed edi-torial for the magazine for the rest of the year.

An exchange I overheard at the conventionhelped confirm that this leadership-focused issue isas relevant as ever. A couple of fellows were gettingacquainted and one, a geologist, said he worked at

the Hemlo mine. Oh, I didnt realize that was still open, was the response.The story of Barricks Hemlo Mine is one that needs to be told. It is this issues

project profile, and not only continues to produce but has also earned theMining Association of Canadas Towards Sustainable Mining Leadership Award.The work its operators do has reduced the environmental impact of the mineand enhanced its social and economic benefits for the neighbouring communi-ties. Those who make the news in open pits and underground shafts may notalways be the most inclined to go tell it on the mountain that job falls to us atCIM Magazine.

Our aim for this issue has been to tell success stories and help recognizethose who are making a difference. When we began planning these stories, wefocused on leadership, both the principle and its practice, in the form of inno-vative and award-winning projects, programs, people and initiatives.

For example, the Upfront story Reliability retool, by Krystyna Lagowskichronicles the now two-year-old maintenance overhaul underway at TeckResources coal operations. In Efficiencies of (small) scale, Eavan Moore drillsdown to find out what has earned New Brunswick top billing among miningjurisdictions.

Our feature, Lodestars the guiding lights for the next generation of womenin mining, aims to help raise the profile of one of our industrys most underde-veloped and valuable commodities. Women still represent a dismal 14.4 percent of the minerals industry workforce, and so we hope that the stories of thefemale leaders profiled serve as inspiration for young women who are exploringtheir own career options.

Professional inspiration is also a theme that Julia Martin develops further inher guest column. Careers, she argues, are best evaluated from the perspectiveof a persons 90-year-old self.

Despite our planning, however, life often strays from the course we wouldchoose. All of us at CIM want to add our voices to MAC president PierreGrattons (pg. 20) in expressing our condolences to the family and friends whoare mourning the death of Paul Stothart. Paul was MACs vice-president of eco-nomic affairs, a regular and well-loved contributor to this publication and oneof this industrys consummate leaders.

Ryan Bergen, senior editor

June/July 2012 | 7

Old made new, new made to order

In the Old made new piece in the Tools of the Trade (p. 14, May2012) it should have been noted that Westpro is in fact two compa-nies: Westpro Machinery Ltd., a manufacturer of new mineral pro-cessing equipment, and Westpro Contract Services Ltd., a subsidiarywhose services include re-manufacture of existing equipment. Theimage accompanying the text depicts a new mill manufactured byWestpro Machinery, not a reconditioned one. Please also note thatthe name of the manager of mineralprocessing Brock Taplin was mis-spelled. We regret the error.

Red Dog still having its day

In Zinc: A balancing act (p. 57,Dec. 2011/ Jan. 2012) we reportedthat Tecks Red Dog Mine was beingreplaced by the Aqqulak Mine. Infact, only the initial deposit has beenexhausted and the Red Dog plant willreceive ore from the Aqqulakdeposit.

errata

Over the next four years, Vale, a leading global natural resources company,

will invest $10 billion in our Canadian mining operations to develop

leading technologies, increase efficiencies and strengthen our global

competitiveness. We are looking for professionals, including miners,

electricians, engineers and geologists, who can help us make that happen.

To find out just how big your next career move could be, visit valejobs.ca/gobig.

YOU HAVE BIG DREAMS. WE HAVE BIG PLANS.

GOOD FIT.

4:19 PM

NORCAT appoints Duval as new CEO

Don Duval was appointed CEO of the NorthernCentre for Advanced Technology Inc. (NORCAT),replacing Darryl Lake, the Centres founder. TheChatham, Ontario native, who starts his newposition on July 9, plans to develop a new strate-gic plan for NORCAT with support from staff andcommunity stakeholders. Duval has extensiveknowledge of the business world, with variouspast roles focused on strategy and operations.The NORCAT Board of Directors is looking for-ward to working with Don with his unique expe-rience and enthusiasm, said Board chair DanKochanowski. Don is a dynamic leader who hasdemonstrated tremendous success. His leader-ship will be an asset to NORCAT.

MOVING ON UP

What a resounding successthe 2012 CIM Convention inEdmonton was, and what away to start my term as CIMpresident! The presence ofmore than 1,400 delegates,over 1,700 exhibitors and1,000 trade show visitors, aswell as more than 3,700 par-ticipants in the M4S show,illustrates the strength of theCIM brand and the impor-tance of mining to theCanadian economy.

An event of this size requiresthe combined efforts of a ded-icated team of CIM staffersand members. On CIMs behalf,

I want to thank the general co-chairs, Chuck Edwards and Tim Joseph;the technical committee chairs and presenters; the executive director,Jean Vavrek; the director of events, Lise Bujold; and the CIM staff. Ourspecial thanks to the City of Edmonton for the warm Western welcome.Finally, we could not put on such an event without our generous spon-sors, led by Caterpillar, P&H MinePro Services, BHP Billiton and SMSEquipment/Komatsu. Thank you!

presidents notes

Looking forward, I recently sat down with the CIM executive committeeand Jean Vavrek to identify the key issues we face. Our platform for thenext 12 months includes:

The continued effort to expand our links to potential members andemerging opportunities abroad, such as in West Africa and LatinAmerica where Canadian companies are active.

The ongoing business transformation project that comprises theoverhaul of our IT systems and the launch of a new CIM website.

A focus on professional development, bringing young leaders intoBranches and Societies and into the CIM Council.

We also must make Toronto 2013 a success so that it can be a catalyst forfuture events in Canadas mining financial centre as the annual CIMConvention moves to the Vancouver/Montreal two-city format.

CIM represents over 11,500 individual members and 200 corporatemembers, and membership is growing. The Institute is built around itsvolunteers, and I encourage all of you to be a part of the activities heldacross the country. I look forward to working and meeting with manyof you in the year to come as we stay the course toward theseobjectives.

Terence BowlesCIM President

Le congrs 2012 de lICM Edmonton a connu un succs retentissant.Quelle merveilleuse faon damorcer mon mandat en tant que prsidentde lICM ! Plus de 1 400 dlgus, 1 700 exposants et 1 000 visiteurs,et plus de 3 700 participants se sont rendus au salon M4S, ce quitmoigne du dynamisme de la bannire de lICM et du rle importantque joue lindustrie minire au sein de lconomie canadienne.

Lorganisation dun vnement dune telle ampleur ncessite lesefforts combins dune quipe dvoue demploys et de membresde lICM. Au nom de lICM, je tiens remercier les co-prsidentsgnraux, Chuck Edwards et Tim Joseph; les prsentateurs et lesprsidents du comit technique ; le directeur gnral, Jean Vavrek ;la directrice des vnements, Lise Bujold ; et le personnel de lICM.Quel formidable groupe de personnes dvoues ! Je souhaiteremercier tout particulirement la ville dEdmonton pour sonchaleureux accueil, typique de lOuest canadien. Enfin, la tenue duntel vnement aurait t impensable sans nos gnreux commandi-taires, en tte desquels figurent Caterpillar, P&H MinePro Services,BHP Billiton et SMS Equipment/Komatsu. Merci !

Jai rcemment rencontr les membres du comit directeur de lICM etJean Vavrek afin de dfinir les principaux enjeux auxquels nous faisonsface. Au cours des douze mois venir, notre attention portera sur lesaspects suivants :

poursuivre nos efforts en vue de multiplier nos liens avec des mem-bres potentiels et dexplorer de nouvelles possibilits ltranger,

notamment en Afrique de lOuest et en Amrique latine, o des entre-prises canadiennes exercent des activits ;

avancer le projet de transformation oprationnelle en cours, y com-pris la rorganisation de nos systmes de TI et le lancement dunnouveau site Web de lICM ;

privilgier le perfectionnement professionnel et attirer les dirigeantsde la relve vers des divisions et des socits et au sein du conseilde lICM.

Enfin, tout mettre en uvre pour assurer le succs de Toronto 2013 afinque ce congrs serve de catalyseur des vnements futurs dans lecentre financier du secteur minier canadien, alors que le congrsannuel de lICM sera dsormais prsent selon un format ax sur deuxvilles : savoir, Vancouver et Montral.

Le nombre des membres de lICM, qui compte plus de 11 500 mem-bres individuels et 200 membres corporatifs, ne cesse de crotre.LInstitut bnficie de lappui de ses bnvoles, et jinvite chacun den-tre vous prendre part aux activits organises partout au pays.Jespre avoir le plaisir de travailler avec vous et de vous rencontrer engrand nombre au cours de lanne venir, alors que nous maintenonsle cap vers ces objectifs.

Terence BowlesPrsident de lICM

Traduit par CNW Group

Staying the course

Maintenir le cap


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TOOLS OFTHE TRADE safety

AnearthroughthegroundMagneLink Magnetic Communication System is a new,self-contained, through-the-earth wireless system thatprovides post-accident, two-way, emergency voice andtext communications for the coal mining industry,independent of surface or in-mine infrastructure. Thesystem transmits via magnetic waves through the earth.It was designed for a post-accident situation to allowminers and those on the surface to communicate, saysLockheed Martins MagneLink program managerWarren Gross. But you can interface other data to theMagneLink, whether it is leaky feeder radios, trackingsystems or other sensor data. That means there are otherpotential uses for this product, including using it as asubaerial wide network that allows the surface rescueteam to communicate with all the miners down belowand provide them with situational updates.

VehiclesafetyupdatesinrealtimeIn February 2012, Doran announced the integration of the Doran 360 tire-pressuremonitoring system and its SafetyTrax AVL fleet monitoring system, which providesdynamic, web-based software for fleets, including GPS,speed tracking and the ability to create ad-hoc orscheduled reports. From a safety standpoint, theintegration allows the mines to know in real-time if a vehicle has critically low-tire pressure,which could prevent a blowout, and it also sendshigh-temperature alerts, says Jim Samocki,Dorans general manager. It can send emailalerts or text messages to a mine-site manageror a control room so that if a driver is ignoring thein-cab monitor, somebody else can have eyes on itto help make the driver accountable.

DuedustdiligenceIntroduced last summer, the Sensidyne CDEM-1000 CoalDust Explosibility Meter is a handheld instrument developedat the National Institute of Occupational Safety & Health(NIOSH), and commercialized as a joint effort betweenNIOSH and Sensidyne, LP. It was designed to be used bycoal mine operators, safety officials and regulators as ascreening tool to help manage daily rock dusting operationsand mitigate explosion hazard potential. It displays a red

indication for insufficient rock dust levels and a green indication when the minimum safelevel of rock dust is reached. For the first time, mine operators have a real-time device tohelp in identifying and mitigating the explosion hazards resulting from inadequate rock dustlevels, says Howard Mills, president, Sensidyne, LP.

June/July 2012 | 11


MantrackerIntegrated with a minesexisting communicationssystem, the HelianUnderground SafetySolution suite of productsprovides miner and assetlocalization during normaloperations. The minercarries a little tag, saysWisam Farjow, vice-president, engineering,Mine Radio Systems Inc.When they go through thevarious zones, beacons andreaders store and send theinformation to the surface, where we have a softwaresolution that presents the mine map and customizedreporting. We also have a paging system forevacuation that uses the same tag. The third part ofthis is the trapped miner location. This doesntrequire infrastructure because it uses through-the-earth communications.

TimelytoothextractionToothMetric technology from Motion Metrics International Corp. is arugged, embedded machine vision system that monitors the conditionof mining shovel bucket teeth and informs in real time the machineoperator of possible tooth breakage. It is used on more than 170shovels around the world. Now, Motion Metrics International Corp. hasadapted that technology for front-wheel loaders. The system usescameras that send images to a computer system for analysis of eachindividual tooths appearance and alerts the operator if there is aproblem. Removing a tooth once it has made its way to the crusher isa very dangerous procedure and can lead to fatalities and costlydowntime, says Enoch Chow, marketing manager, Motion MetricsInternational Corp.

ReliablerefugeMineARC Systems new HRM-ELVPrefuge chamber has a number ofimprovements on the companysprevious model, the HRM-PLP.Because it is smaller and lighter, it iseven more portable and mobile, saysMike Lincoln, general manager,MineARC Systems. The HRM4-ELVPuses an extra-low-voltage controlsystem to power the chambersinternal life support systems, whichinclude CO/CO2 scrubbing, airconditioning and dehumidifying.The MineARC Refuge Chamber ELVControl System combines a high-reliability temperature compensatingcharging system with batterymonitoring circuitry to produce anadvanced, fully programmedcharging/monitoring system thatelevates the safety of refugechambers, says Lincoln.

KeepgassesincheckInstead of using a conventional analog signal, theSmart Head gas monitoring system digitizes the gassignal directly at the sensor. This results in dramaticallyhigher accuracy, says Dave McCullough, ConspecControls Ltd.s operations manager. As well, there isfar less degradation of the signal, which dramaticallyimproves gas monitoring. Each unit also has its owntemperature sensor because gas sensors will react at adifferent rate depending on the ambient temperature,

so putting in a temperature compensation rate also dramaticallyimproves accuracy. Each SmartHead also stores operationalparameters, past calibrationresults, operating temperaturesand real-time records that enablethe supervising system to take suchproactive actions as plotting theinternal periodic calibration recordsto predict the operating life of the sensing cell.



AsecondsetofeyesGroundProbe industry pioneeringslope stability radar (SSR) technologyand deformation analysis are embodiedin the Work Area Monitor (WAM),which uses SSR in real time with fast-monitoring capabilities, taking between30 seconds to 120 seconds per scan.Winner of the 2011 Innovative MiningSolution Award from Mining ProspectAwards, the system is installed on avehicle and includes integratedpersonal alerts for the crew andsupervisor/geotechnical staff, allowingaccess to operations where high wall orslope issues add a heightened riskfactor. The Work Area Monitor is quickto set up and easy to use, says AlbertCabrejo, senior geotechnical engineer,GroundProbe. WAM is your spotterthat tirelessly looks out for you, day andnight, keeping you safe.

RemoterockbreakingTransmins RocklogicRockbreaker ControlSystem for remote operationof rockbreakers received aWestern AustraliaInformation Technology andTelecommunications Awardfor 2011. Its the first of itskind to be fully tested in aproduction miningenvironment, says TanePendragon, a seniorautomation engineer on theControls & Automation team

at Transmin. It includes collision avoidance which usessensors and a 3D model of the installation to guard therockbreaker against damaging collisions automatedmovements and remote operation that allows the operator tosit, safe from the hazards of underground mining, in a controlroom up to 20 kilometres from the rockbreaker, saysPendragon. Automated movements allow the operator toexecute pre-programmed action, such as parking anddeploying, or moving to a particular position at the touch of abutton, saving time and workload.

Weve gone deeper than anyone.

Its high time we surfaced.

As a global leader in underground mining, Dumas takes pride in adding the extensive surface mining

capabilities of Tercon to its client offering. Our new, expanded service represents an unparalleled

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project through from concept to completion. Learn more at dumasmining.com

The Australian mining tax,scheduled to take effect onJuly 1, raises the bar on taxesapplied to mining projectsinternationally, according toEdward Heakes, a Toronto-based partner and taxationexpert at Norton Rose Group.

Its hard to make apples toapples comparisons, be causeevery jurisdiction im poses thetax in a slightly different way,he said. But, according toHeakes, the tax puts Australiaout on the forefront because,at the end of the day, it booststhe governments take com-pared to other major miningjurisdictions, such as Canada and Chile.

The Mineral Resource Rent Taxamounts to 30 per cent of the profits

The skinny on Australias fat new taxMany miners prepare to pay more for their metals

By Virginia Heffernan

from Australias two biggest exports,coal and iron ore, though the real ratefalls to 22.5 per cent after a so-called

extraction allowance isapplied. Combined withincome taxes, mining compa-nies will be paying an effectivetax rate of 42.3 per cent com-pared to an international aver-age of 38 per cent.

Miners with a profit of lessthan AUD$75 million will beexempt, and companies withGreenfield exploration projectswill be able to carry forwardexpenditures until project rev-enues exceed those of expenditures.

The revenue grab is sympto-matic of a wave of resourcenationalism that is sweeping

the globe from Ecuador to Indonesia asgovernments seek a larger share of theprofits producers are enjoying as aresult of rising commodity prices.South Africa may even leapfrog overAustralia if a proposal to impose a 50per cent tax on mine profits in thatcountry is accepted.

Although the tax introduced byAustralian Labour Prime Minister JuliaGillard is expected to add an estimatedUS$11.1 billion to government coffersover three years, it is not as extreme asthe super profits tax proposed by herpredecessor, Kevin Rudd. That tax wassignificantly higher at 40 per cent,applied to all mining commodities,and led to Rudds downfall andGillards win.

In effect, instead of the tax apply-ing to 2,500 projects, it will just applyto the 300 to 350 that would have rep-resented the majority of the collectionanyway, explained Philip Bisset, taxpartner at Clayton Utz, a law firm thatoperates out of Perth and Brisbane.

Another major amendment is min-ers can elect to use the market value oftheir existing mining facilities andequipment to offset the tax, whereasthe previous tax put mature miningoperations at a disadvantage because it


news nortonrose.com

Andrew Forrest, the non-executive chairman of Fortescue Metals group, wavesa flag during the inauguration of one of the company's trains.

Courtesy of F

ortescue

Metals G

roup

Canada + 800 [email protected]

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June/July 2012 | 15

was based on the amortization of thoseassets over time.

That amendment, as well as arestriction that prevents miners fromdeducting the interest expenses onmine financing, now swings the pen-dulum too far in favour of larger com-panies, argue some of the smaller andless mature miners.

Most outspoken has been iron oreproducer Fortescue Metals, which hassaid it will launch a High Court chal-lenge of the tax. Fortescue claims thetax was negotiated behind closed doorswith the countries three major miners,BHP Billiton, Rio Tinto and Xstrata, tominimize their tax liabilities. Fortescuechairman Andrew Forrest has gone sofar as to say that Gillard agreed

behind Rudds back to reform thesuper profits tax in exchange for a haltto a damaging anti-Labour advertisingcampaign led by the big three.

The Mineral Resource Rent Taxwill ensure the worlds biggest minershave an unfair advantage in the mar-ketplace by reducing their overall unitcost compared to the smaller miners,states Fortescue on its web site. It willreduce investment in Australia, meas-urably and instantly for early stage ironore and coal projects, as investors areencouraged to invest in projects andemployment opportunities away fromAustralia.

But Heakes pointed out that exemp-tion for profits up to AUD$75 millionis a major benefit for smaller compa-

news

nies, more in line with the Canadianapproach, which leans towards prefer-ential tax measures for smaller busi-nesses. And because the new tax hassome real complexities associatedwith implementation, the impact onindividual projects remains to seen.

[The tax] is going to be a factor thatis costed in to determining where com-panies locate their resources, said Bis-set. But there is still debate around theextent that the market value electionfor mature mining projects may sheltersome projects in the early years.

That debate may be moot if theopposition Conservative party, whichhas vowed to scrap the tax, wins thenext federal election in November2013. CIM

June/July 2012 | 17

international.gc.ca

Case closedCSR Counsellors decision helps clarify role By Virginia Heffernan and Peter Braul

In February, the office of Canadas CSR Counsellor, MarketaEvans, decided to close a case against First Quantum Mineralscopper-gold mine in Mauritania before formal mediation couldbegin. It was the second case to be brought to the Counsellor since2010, when the office was created, and many were looking for evi-dence of the Counsellors capacity to mediate these disputes.

Eventually, the representative of a community near the GuelbMoghrein mine, 250 kilometres northeast of the capital city ofNouakchott, was told to take concerns about pollution, labourpractices and stakeholder engagement back to First Quantumslocal grievance office for consideration.

This decision is being viewed positively by some. TheCounsellor was successful in bringing the two parties together,said Ross Gallinger, executive director of PDAC. And essentially,that is all that Evans office could have done. In a final report onthe case, her office states that it is not a first resort mecha-nism In this case, an operational level mechanism does existand we have encouraged the requestors to access that first.

Another positive outcome of the process, Gallinger said, isthat First Quantum has agreed to consider hiring a local con-vener to raise awareness of its existing grievance process.

Senior advisor Erica Bach notified CIM Magazine that Evanscould not comment on the specifics of the case, but Evans didrespond to assertions that the office is ineffective. She said theoffices Alternative Dispute Resolution (ADR) method buildstrust, allows parties to share information and fosters problemsolving in a way that traditional tools, such as litigation or socialprotest, cannot.

ADR techniques ranging from collaborative problem solv-ing to consensus building to facilitation and mediation havebecome mainstreamed for many complex multiparty disputes,Evans wrote in an e-mail to CIM Magazine. The push toenhance and expand processes like this office is expected nowto gain further steam, as the newly endorsed Ruggie Framework the UN Guiding Principles explicitly includes the expansionof all forms of access to remedy.

Still, MiningWatch Canada argues that the process is tooth-less as long there is no obligation on behalf of either party toparticipate. This process does not facilitate in any way peoplehaving access to information, to responses or any sort of resolu-tion, said Jamie Kneen, communications and outreach coordi-nator for MiningWatch. As far as clearing the air (on the FirstQuantum case), I dont think it worked, he remarked.

CIM Magazines attempts to reach First Quantum and thecommunity representative, Ahmed Mohamed Lemine, wereunsuccessful. So whether the communitys concerns are beingresolved on the ground remains unknown.

With only two cases under its belt, it may be too early tojudge the effectiveness of the CSR Counsellor, said Gallinger,who added that the Canadian governments overall CSR strategy of which the Counsellor office is one part continues toprogress and evolve. CIM

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CSR is just the beginningMcGills Institute for the Study ofInternational Development focuses onpublic-private partnerships

By Mireille Goulet and Peter Braul

Collaboration between mining companies andNGOs is likely to become more common, thanksto the Canadian International DevelopmentAgencys (CIDA) new preference for public-pri-vate partnerships. In September 2011, the agencyannounced its support of CSR projects that threeCanadian NGOs developed with mining compa-nies in Burkina Faso, Ghana and Peru. That movehas stirred up controversy in many circles andwas hotly discussed at a conference on public-private partnerships for sustainable developmentin the extractive industries, held by McGill Uni-versitys Institute for the Study of InternationalDevelopment (ISID), in March.

This was the first conference of its kind forISID, which was founded in 2008. According to ISIDsfounding director Philip Oxhorn, the organization hasonly recently seen the promise that mining holds for pub-lic-private partnerships in international development. Wedidnt talk about it in 2008, he said. About a year ago, westarted realizing this was the area we wanted to focus onfor public-private partnerships. As such, challenges incollaboration between extractive industries and communi-ties, and facilitation of public-private partnerships werecentral to the discussion during the three-day event.

In the face of CIDAs cancellation of funding for cam-paigning NGOs, the meaning of the agencys new directionwas also the subject of debate. In his keynote address, IanSmillie, chair of the Diamond Development Initiative, indi-cated that while CIDA partnerships with industry are nei-ther new nor rare, the controversy is that CIDA-supportedprojects are now focused more on creating Canadian com-mercial advantage in developing countries. Because suchpartnerships will be subject to scrutiny, he said, NGOsinvolved ought to expect repercussions, ensure thepurity of potential funders, study the communitiesimpressions of the corporate partner and research its rela-tionship with government.

According to Oxhorn, however, misinformation aboutpublic-private partnerships is fuelling the adversarial atti-tudes between mining companies and NGOs. There are alot of people on all sides that are caught up with the waythings used to be when the relationships were much moreconfrontational, he pointed out. Thats not helping any-one, including the communities. Its much more rich andinvolved than is often portrayed.

The ISID conference was intended to find out throughdiscussion where the stumbling blocks are, Oxhorn

June/July 2012 | 19

remarked. What we want to continue doing at the insti-tute is to provide a public platform to enrich the debate.

The panel on resource extraction and indigenous com-munities made clear those communities want to play anactive role in their futures. Tony James, chief of theWapichan people in Guyana, explained the origins of theland conflict that has mired 60,000 indigenousGuyanese. Only a portion of the area recognizedas Amerindian land after Guyanas independ-ence was titled as such, and this included min-ing concessions in some cases on sacred sites that Aboriginals were not told about. Hedescribed the profound social impacts onindigenous communities that have come withmining projects, and pointed out that develop-ment can mean different things to indigenouspeople.

At the laws, institutions and challenges ofgood governance panel, Riccardo Rossi-Ricci,president of the Ottawa-Gatineau chapter of theSociety for International Development, askedwhether addressing basic needs in infrastruc-ture, education and health should remain theresponsibility of government and whether min-ing companies act as surrogates when they takeover this role.

Along with critical challenges to overcome, plenty ofsuccess stories were shared as well. At the successful pri-vate sector strategies for community engagement panel,Susan Stocker, manager of sustainability and communityinvestment at Teck Resources Limited, offered insights onhow her organization has achieved successful partner-ships. Teck has partnered with Unicef on its Zinc andHealth initiative, and managed to solve legacy water issuesat a project in Chile by partnering with Oxfam. Together,they developed dialogue tools that could address the needsof the local people.

Valerie Pascale, CSR manager at Goldcorp, spoke abouther companys partnership with Right to Play. The programthey run together, called Promoting Life-skills in Aborigi-nal Youth, or PLAY, is designed to use the power of sportto develop leadership qualities in disadvantaged youth.Pascale said success depends not only on the proverbialearly start, but also on providing a contact person for thecommunities and taking into account that any strategyneeds to be customized to the context and the culture.

Oxhorn believes public-private partnerships, like thosesupported by CIDA, offer a new model for success in inter-national development that goes beyond CSR. For me,CSR is what companies need to do to maintain good rela-tions with the community, and particularly with theirshareholders and governments back home, said Oxhorn.But what we envision the partnership to be is an actualcollaboration between the two so that more of the valueadded remains in the community. CSR is often seen asbeing one-way the corporation to the community andI dont think that is sufficient. CIM

news

Hematological Malignancies Personalized Medicine Program atOttawa Hospital Recent advances in cancer research suggestgenetic makeup can determine cancer susceptibility. Technolo-gies developed over the last decade provide tools to assess a per-sons genetic blueprint quickly and economically by analyzing

biological samples, such as blood. Informationobtained can help design personalized medicinestrategies that will lead to better treatment andrecovery. But more funding is needed for researchto continue and for the technology to advance.For this reason we ask that donations in Paulsmemory be made to the Bone Marrow TransplantFoundation of the Ottawa Hospital Foundation,designated to The Hematological MalignanciesDNA bank under the direction of Dr. BrentZanke. To donate, please go to www.ohfounda-tion.ca/ways/index_e.asp, choose Online dona-tion then, under Donation Information, selectIn Memoriam Donation and choose Other(please specify below). In the text box specify

Hematological malignancies DNA bank. For any inquiriesplease contact Sarah Stothart at [email protected] or KarenColby-Stothart at [email protected]. Thank you for honour-ing Paul by supporting research that is critical for future patients.

Paul Stothart Scholarship in Mineral Economics MAC and itsmembers have established the Paul Stothart Scholarship inMineral Economics. The scholarship will be open to Canadianuniversity students in their final year of a Bachelors degree inEconomics, or in a Masters program with a focus on mineraleconomics. The award will be granted annually and the fundwill be set up to be self-financing in perpetuity. MAC willadminister the scholarship. For more information, please con-tact Marilyn Fortin at [email protected].

The Paul Stothart Memorial Trophy Paul was one of the mostdecorated athletes in Queens University history. Among hismany achievements was receiving the Senator Joseph SullivanTrophy, awarded to the top Canadian University hockey player,for two consecutive years. Pauls friends are working withQueens University and the Queens Golden Gaels to create anendowment and trophy in his honour. The Paul StothartMemorial Trophy and cash prize will recognize a Queens playerfor academic performance and leadership on the ice. For moreinformation, please contact TomManley at [email protected]. CIM

It is with great sadness that we announce that Paul Stothart,MACs vice-president of economic affairs, has died after a dif-ficult, hard-fought battle with cancer.Paul joined MAC in 2006 and was responsible for a wide

range of policy files, including tax and economic affairs,energy policy, trade and international compet-itiveness, and transport. While at MAC, Paultransformed the associations flagship publica-tion, Facts and Figures, into an invaluableindustry reference. The most recent edition ofFacts and Figures was written by Paul inbetween chemotherapy treatments. Paul alsopublished a regular column in CIM Magazine,reporting on a wide range of public policyissues related to mining.

Paul was a graduate of Queens Universitywith an MBA (Finance) and a Bachelors in CivilEngineering, but his early career was as a pro-fessional hockey player. He played in the Ger-man hockey league in the early 1980s and, in1983, played on Team Canada against the former Soviet Unionand Czechoslovakia. He was also a recipient of the Jenkins Tro-phy for bringing the highest academic and athletic honour toQueens University.

Later in life, Paul worked with Ernst & Young and ExportDevelopment Canada and then took on a series of roles as asenior policy advisor for several federal government ministersin the Natural Resources, Trade and Transportation portfolios.A prolific writer and policy analyst, he published many articlesin Policy Options on economic policy, Canadian unity and cul-tural issues.

Academic and athletic accomplishments aside, Paul will beremembered by colleagues for his wit, Chrtienesque smile,constant good humour, erudition and playfulness. He will besorely missed. Paul is survived by his wife Karen and threechildren, Sarah, Alex and Julia.

Before his passing, Paul expressed a personal interest indirecting charitable donations to the Hematological Malignan-cies Personalized Medicine Program at Ottawa Hospital inrecognition of the ongoing, advanced research by his doctors,and to the Ottawa Hospital Research Institute (an affiliatedinstitute of the University of Ottawa). Friends and alumni havealso created a Paul Stothart Memorial Trophy at Queens Uni-versity, and MAC has established an endowment and a PaulStothart Memorial Scholarship in Mineral Economics. Detailson these initiatives follow.

In loving memory Paul Stothart (May 17, 1957 April 17, 2012)

BY PIERRE GRATTON

columnsI N M EMOR I AM mining.ca


Pierre Gratton is president and CEO of The Mining Association of Canada

June/July 2012 | 21

13.3 per cent of employees of CAMESE members work inCanada on the development of new products or technologies forthe mining industry, from pure research to production engineer-ing. Further, nine per cent of the employees of the surveyedfirms work on commercializing these technologies.

While many firms exist solely to cater to the domestic market, most mining-specific suppliers have an international presence. A number of such companies export far more thanhalf of the products and services produced every year.

Today, Canada is one of the worlds leading producers ofminerals and metals. We are the undisputed global leader inmineral exploration and exploration financing. With Canadianmining companies behind 5,000 projects in over 100 coun-tries, Canadian mining supply firms naturally accompany theindustry around the world, searching for new markets.

The Canadian industrys high rate of exploration and pro-duction has prompted the development of highly competentmining supply companies in thecountry. In fact, nearly everythingthat is needed to supply an effi-cient, safe and environmentallyresponsible modern mine can besourced in Canada. CIM

W hen I started my career in exporting Canadian miningtechnology to world markets 40 years ago, there werechallenges for exporters that are hard to imaginetoday. International travel and communications were, bytodays standards, difficult. Telex machines received messagesat the rate of a character per second. Computers and wordprocessors existed, but they were not the tools of business. Faxmachines had not been developed. Visas were required fornearly every country that you needed to visit and airfares werevery costly.

However, Scintrex, the manufacturer of geophysical equip-ment, and my then-employer, needed markets beyond Canadato support its specialized manufacturing and R&D capabilities.Despite the challenges, we successfully increased our ship-ments to an average of 50 to 60 countries over a decade.

In 1981, members of an Ontario mining trade mission toChile and Peru realized that, by working together, they couldbetter influence export markets. I was one of them. Around theswimming pool of our hotel in Lima, we hatched the idea todevelop the export trade association I lead today. CAMESE isone of the strongest national, sectoral associations in todaysmining supply sector.

From 1995 to the present, CAMESE has organized Cana-dian participation at 150 international mining events, whichhave attracted over two million attendees and hosted 2,500Canadian supplier booths, resulting in 12,000 business leadsfor Canadian suppliers. Over 50,000CAMESE source-books, with a listing ofsuppliers called the Compendium of Cana-dian Mining Suppliers have been distrib-uted at these events.

CAMESE has become a first-class,cost-effective provider of marketing sup-port for Canadian mining supply firmslooking to gain exposure in internationalmarkets and unites over 300 of Canadasleading mining equipment suppliers.

Given the large domestic market andlow-tariff protection since the end of WorldWar II, Canadian mining suppliers havehad to compete with imported mininggoods and services. Thus, Canadian suppli-ers are driven to innovate and can competewith the best in the world. Domiciled in adeveloped country, Canadian mining sup-pliers have been able to develop or gainrapid access to advanced technology toensure competitiveness. A survey revealed

CAMESE opens world to Canadian suppliers

BY JON BAIRD

columnsS U P P LY S I D E camese.ca

Jon Baird, managing director of CAMESE and the immediate past-president ofPDAC, is interested in collective approaches to enhancing the Canadian brandin the world of mining.

A page for and about the supply side of the Canadian mining industry

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pre-production development expenditures, the 10 per centrate will apply for expenditures incurred in 2012 and in2013, and drop to seven per cent for expenditures incurredin 2014 and to four per cent for expenditures incurred in2015. There will be no ITC in subsequent years. The elim-ination of this ITC is disappointing because it has been animportant incentive for the mining industry to undertakehigh-risk mineral exploration activity.

The Atlantic investment tax credit, a 10 per cent ITC forexpenditures on property used in certain activities occurringin Atlantic Canada, is also being phased out for expendituresincurred on mining, and oil and gas activities. The 10 percent ITC rate will apply for expenditures on qualifying prop-erty acquired before 2014, and will be reduced to five percent for property acquired in 2014-15. There will be no ITCin subsequent years. This initiative will eliminate an impor-tant incentive for mining in Atlantic Canada.

News for foreign corporations with Canadian subsidiaries

Canadian corporations are limited in the amount ofinterest expense they can deduct for tax purposes on debtowing to non-residents of Canada who are (or who arerelated to) significant shareholders of the Canadian corpo-ration (for example, a foreign parent of a Canadian sub-sidiary). Pre-budget, the amount of debt that wasinterest-deductible for tax purposes was limited to $2 forevery $1 of equity. The budget reduces this limit to $1.5 ofdebt for every $1 of equity (effective for taxation yearsbeginning after 2012). Foreign corporations with Canadiansubsidiaries need to review their financing before 2013.

A separate measure deals with investments made byCanadian subsidiaries of foreign corporations. This meas-ure applies where the Canadian subsidiary acquires aninterest (debt or equity) in a foreign corporation, as is typ-ically the case when a new foreign project is started. Unlessit can be shown that the investment was not made prima-rily for Canadian tax reasons, the investment may triggerCanadian dividend withholding tax. The scope of this ruleis very broad, and foreign mining companies need to con-sider it when their Canadian subsidiaries make any foreigninvestment.

Read more about flow-through shares at miningtaxcanada.com.

Steve Suarez is a partner in the Toronto office of Borden Ladner GervaisLLP. He advises clients on the tax aspects of business transactions andoperations (particularly in the mining sector), and operatesminingtaxcanada.com, a websiteon tax issues of relevance to the miningcommunity.

CIM

The 2012 federal budget represents something of amixed bag for the mining community. While theinvestment tax credit (ITC) for holders of flow-through shares was renewed for another year, other ITCsfor mining corporations are being eliminated (ITCs are adollar-for-dollar reduction in tax payable). Also, foreignmultinationals with Canadian subsidiaries will be subjectto new anti-avoidance measures.

METC extension good news for mineral explorationThe Mineral Exploration Tax Credit (METC) provides

an incentive for individuals to invest in mineral explo-ration companies through flow-through shares (FTS) in theform of a 15 per cent ITC. FTS are an important financingtool that allows a Canadian mining corporation to issueequity to investors at a higher price than it would receivefor normal shares because investors are entitled to claimthe corporations tax deductions that flow through theshares.

In addition to these flowed-through deductions, whencertain mining exploration expenses incurred by the cor-poration (at or above ground level) in Canada andrenounced to a holder of flow-through shares who is anindividual that holder is entitled to an ITC equal to 15per cent of the renounced qualifying expenditures.

The Income Tax Act required that qualifying expendi-tures be incurred by the corporation by the end of 2012,and be renounced to the investor under an agreementmade before April 2012. The budget extends the 15 percent METC for another year, by extending both the date forincurring qualifying expenditures to the end of 2013, andthe deadline for entering into the flow-through share sub-scription agreement governing renunciation to March 31,2013. This extension of the ITC preserves the benefits ofan important financing tool for Canadian miners, and isvery welcome, although it would be preferable for this ITCto be made permanent.

Cuts to ITCs impact incentives for some mining projectsCanadian corporations engaged in pre-production explo-

ration and development activities for diamonds, or base orprecious metals, were entitled to an ITC equal to 10 per centof the amount of qualifying expenditures. The budgetphases out the pre-production mining expenditure ITC.

For pre-production exploration expenditures, the ITCwill continue to apply at the 10 per cent rate for expendi-tures incurred in 2012. The rate will drop to five per centfor expenditures incurred in 2013, and there will be noITC for expenditures incurred in subsequent years. For

Federal government adjusts mining tax credits

BY STEVE SUAREZ


columnsE Y E O N B U S I N E S S blg.com

June/July 2012 | 23

offers students a complete overview of the range of opportuni-ties available in mining and, more importantly, identifies whatskills and credentials are required to access them.

The first program was delivered from November 2011 toMarch 2012 by Northern Colleges South Porcupine campus,in partnership with local mining companies Goldcorp (Porcu-pine Gold Mines), Dumas and Detour Gold. Other partnersincluded Porcupine Prospectors and Developers Association,Misiway Milopemahtesewin Community Health Centre, Tim-mins Native Friendship Centre, Ministry of Northern Develop-ment and Mines, Wabun Tribal Council and MushkegowukEmployment and Training Services.

The program is a bridge to new opportunities; graduateshave either secured employment in the mining industry, arepursuing further education, or are in the process of findingemployment in the industry. Northern College is planning asecond intake of Mining Essentials learners in 2013. Following the launch of the Mining Essentials program at thebeginning of 2012, MiHR announced the start of Mining NewPossibilities Essential Skills for Aboriginal Peoples. The$940,000 project, funded by the government of CanadasOffice of Literacy and Essential Skills, will expand the scopeof Mining Essentials by ensuring key recommendations fromthe pilot are implemented to address the unique needs ofMtis and Inuit peoples. The project will establish a sustain-able and nationally standardized Mining Essentials program,which will include e-learning components and a sophisticatedtrainers portal.

MiHR has mobilized employers, educators and Aboriginalgroups to work more collaboratively and to enhance partner-ships, and is looking for more partners to deliver MiningEssentials in the fall. Interested companies, communities andeducators should contact [email protected] for moreinformation on how to get started. CIM

The mining industry outperforms the rest of Canadaseconomy in the employment of Aboriginal peoples. In2006, Statistics Canada reported seven per cent of themining workforce self-identify as being of Aboriginal descent.A great deal of potential, however, remains to be developed.MiHR is committed to facilitating connections between Abo-riginal organizations and the education and mining sectors insupport of this continued effort to increase Aboriginal inclu-sion in mining, so we continue to make progress.

In March, the first graduating class of the Mining Essentialsprogram at Northern College of Applied Arts and Technologygathered to celebrate their achievements in front of family,community members and mining industry partners. Plannedand led entirely by students, the ceremony included a series ofteam-building exercises focused on themes of community, col-laboration and new opportunities an approach true to theeducational programs spirit.

A work-readiness training program for Aboriginal peoples,Mining Essentials was launched in August 2011. The program,delivered in 12 weeks, is co-owned by MiHR and the Assem-bly of First Nations, and was developed to increase participa-tion rates of Aboriginals in mining by enhancing thepreparedness of the local workforce.

As one of the fastest-growing segments of the Canadianpopulation, and as the population with most communitieslocated in proximity to many mine sites and operations, theAboriginal population represents a large potential pool ofworkers that can support the mining industry by playing a keyrole in mitigating the human resources challenge mining com-panies face.

Mining Essentials teaches non-technical skills and knowl-edge the industry has defined as critical for entry-level posi-tions in mining. Classroom learning includes 11 modules thatteach work-readiness skills, including industry knowledge,attitudes and essential skills like reading, numeracy and writ-ing. Skills are taught through lessons that incorporate tradi-tional cultural teachings with industry examples and casestudies. The program also includes flexible enrichment activ-ities, such as site visits, first-aid training and guest speakers.Mining Essentials contributes to the economic developmentof the community by increasing literacy and local employ-ment rates.

Bob Mack, vice-president of community, business develop-ment and employment services at Northern College, says thecombination of program content and enrichment activities

Industry and community collaboration helping to foster local

employment opportunitiesBY MELANIE STURK

Melanie Sturk is the director of attraction,retention, and transition at theMining Industry Human Resources Council (MiHR), the national HR council forCanadas minerals and metals industry. MiHR contributes to the strength,competiveness and sustainability of the mining industry by collaborating withall communities of interest in the development and implementation of HRsolutions. Melanie is responsible for the initiatives that encourage new workers,particularly those from underrepresented groups, to engage in miningcareersthat support the industryby enhancing workplace diversity.

columnsHR O U T LO O K mihr.ca/en

environment. It is up to the judgement and confidence of theQP to determine whether or not his or her experience quali-fies as relevant experience; it should be noted, however, thata regulator may challenge the QPs evaluation.

It is essential that QPs assess their own experiencebecause, as mineral deposits are diverse in style and arefound in a wide variety of settings, and the stage of develop-ment of a particular project is key to understanding whichtasks are critical and what experience is relevant, there aretoo many variables to be taken into account for regulators toset specific technical standards. To assist QPs in assessing rel-evant experience, CIM Definition Standards on MineralResources and Mineral Reserves provides guidance, stating:The Qualified Person should be clearly satisfied that theycould face their peers and demonstrate competence and rel-evant experience in the commodity, type of deposit and situ-ation under consideration.

With the recent significant interest in exploration for rareearth minerals used for green-technology applications, it maybe difficult to find professionals that have, for example, fiveyears of experience in saprolite weathered carbonatite-hostedphosphate deposits with associated rare earth minerals. Pro-fessionals with experience relevant to the environment, style

With the increased number of unique and novel min-eral deposit types and environments currently beingexplored and developed, it has reportedly becomedifficult for mining companies to identify a Qualified Person(QP) who has the relevant experience and competencies nec-essary to assess and provide a defendable opinion on a par-ticular mineral project. In order to be considered a QP for aspecific project, the individual must have a certain level ofeducation, accountability and relevant experience. Whiledetermining whether the education and accountabilityrequirements are met is usually straightforward, evaluatingwhether an individual has the required amount of relevantexperience is more complicated.

An accurate self-assessment of a QPs relevant experienceis important; the QP plays a critical role in ensuring industrystandards and best practices are followed, and data is verifiedand suitable for public disclosure. In other words, it is theQPs responsibility to determine what is reasonable, appro-priate and ethical for a particular situation and circumstance.

So, what is relevant experience and how is it evaluated?Common sense helps. Relevant experience could mean trans-ferable experience that may reasonably be applied to anothermineral or commodity, deposit type or style, situation, or

Standards for Qualified Persons: how to evaluate relevant experience

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The views expressed in this article are those of the authors anddo not necessarily represent the views of the Ontario SecuritiesCommission.

Craig Waldie and Jim Whyte are both senior geologists with the OntarioSecurities Commission, and are responsible for NI 43-101 compliance reviewsof prospectuses, technical reports and other regulatory filings of Ontario-based mining companies.

of mineralization and considerations unique to thesedeposits may, depending on the facts and circumstances, feelconfident acting as a QP.

As noted in the March/April 2012 CIM Magazine column,the number of professionals with specific experience relatedto lithium and potassium mineral brine projects is limited,but it may be possible for certain professional hydrogeolo-gists, using their educated and experienced judgment, to feelqualified and competent opining onsuch a project and environment.

It is also important to recognizethat, unlike other jurisdictions whereprofessional sign-off of public disclo-sure is limited to exploration results,and mineral resource and mineralreserve estimates, QPs are required totake responsibility for all scientific andtechnical information related to theminerals industry. In addition toexploration results and resource andreserve estimates, this informationincludes, but is not limited to, engi-neering studies and production tar-gets, capital and operating costs,mining and processing activities, proj-ect infrastructure, and economic stud-ies and analysis. Therefore, relevantexperience in designing and engineer-ing open pit mines in certain climaticenvironments, for example, may insome cases be more relevant than a sig-nificant amount of experience with thesame deposit type as the project inquestion, but in a very different cli-matic region.

Regardless of the situation, the QPmust understand they are takingresponsibility for the publicly disclosedtechnical information of the project. Ifthere are concerns about the QPs pro-fessional judgment, technical report,statement, or opinion, the QP may facedisciplinary action by his or her profes-sional association, as well as possiblecivil liability risks for any misrepresen-tation. It is reported that the bestdefence against such claims is for theQP to ensure he or she conducts a rea-sonable investigation and level of veri-fication for the particular circumstanceunder consideration, based on theirprofessional ethics and standards,industry best practices and guidelines,applicable laws and regulations, and ofcourse, relevant experience. CIM

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tant to understand your long-term goals and to make sureyou dont inadvertently prevent yourself from achievingthem. For instance, if your objective is to become a generalmanager of a mining operation, you are unlikely to getthere from a pure consulting background. Instead, you willhave to devote some time gathering hands-on, operationalexperience.

It is also important to seek advice from people with differ-ent experiences. If you are working on a mine site, for exam-ple, talk to external consultants and equipment salesrepresentatives to get a broad range of perspectives.

Change can be scary and thats normalFor some people, even asking for career advice can be

intimidating. Just remember that most people will appreciateyour position and are likely willing to help.

It can also be hard to leave behind everything that is famil-iar friends, family and your present work to do somethingnew. You just need to decide what is important to you andmanage the balance between your professional life and yourpersonal requirements.

There is no right or wrong way to build a career, and eachpersons road to happiness is different. But it is up to you tomake the effort to build the kind of professional life you willwant to remember.

Julia Martin, B.Sc., MBA, is general manager, Toronto / principal miningengineer, based in the Toronto office of AMC Consultants.

CIM

Plan your career (and life) from the perspective

of your 90-year-old selfBY JULIA MARTIN


amcconsultants.com.auG U E S T C O LUMN | P R O F E S S I O N A L D E V E LO PM EN T

Everyone has their own method of choosing the path fortheir professional development. In building my career inmining, I have used a simple exercise for life and careerplanning: every three to five years, I ask myself, Am I happywith my current work and other aspects of my life? Unless myanswer is a resounding YES, I figure out my goals and planhow to move towards them.

I determine those next steps by asking myself, When Im90 years old and reminiscing about my life, what are the thingsthat I might regret NOT having done?

What experiences do you want to have in your life?After earning a B.Sc. in mining engineering (Queens Uni-

versity) in 1994, I worked at an underground mine in easternCanada. I obtained several years of invaluable undergroundexperience and started thinking about the aforementioned bigquestions.

International travel had always been a priority for me, butthat hadnt been reflected in my experiences up to that point.Once I focused on that goal, I became aware of opportunities.When the time was right, I moved to Australia.

I had two main objectives for my trip Down Under: to learnto work in a (slightly) different culture, and to gain open pitexperience. The name of the company, the location of the mineand the commodity being mined were not as important to meat the time. With these considerations in mind, I chose anopportunity that would give me the experience I wanted.

After spending a number of years in Australia, I went trav-eling again. That time, I ended up at a mine in Senegal, whereI learned to succeed in a workplace with a variety of languagesand cultures.

Along the way, I learned about AMC Consultants, the con-sulting firm I work at now, and decided that the opportunitiesavailable through this firm would support the next step in mycareer development. In my current role, I am exposed to proj-ects all over the world, which appeals to my desire for interna-tional travel, and the firms culture, which promotes a healthywork/ life balance, suits my current priorities.

Know your optionsOpportunities for future career development are increased

by diversity in both professional and personal experience: hav-ing practical exposure to learn a wide variety of approaches isinvaluable.

There is no substitute for good operational experience asa basis for most mining-related career choices. It is impor-

Teck makes changesTeck Resources Ltd. made a number of changes to seniormanagement. Rob Scott was appointed senior vice-presi-dent of zinc, while Marcia Smith was named senior vice-president of sustainability and external affairs. Scott wasformerly vice-president of operational excellence andSmith was vice-president of corporate affairs. Ray Reipas,who was vice-president of energy, became senior vice-president of energy, and Graham Foyle-Twining joinedTeck as vice-president of human resources. Foyle-Twiningwas formerly global head of human resources and organi-zational development at Walter Energy.

MOVING ON UP


Many people in the mining industry love fishing, asit provides the same enormous sense of opportu-nity to reel in the Big One that drew them totheir careers. Robert Hunter and Robert Dickin-

son, founders of Vancouver-based Hunter Dickinson Inc.(HDI), shared a love of salmon fishing in their nativeprovince during the rare times they were not pursuingprospects on land. Their techniques were as different as theirpersonalities, yet provide insight into the dynamics of theirpartnership and how it endured the pressures of time toachieve legendary status.

They were as different as can be imagined, says HDIpresident and CEO Ronald Thiessen, who joined the groupin 1994. One (Hunter) statesmanlike, intuitive, dapper, gre-garious and routine, and the other (Dickinson) informal,intense and detailed, tactical, with a need for occasional soli-tude but still a potential for spontaneity.

Still new to the company and a fishing novice, Thiessenspent a day with each of the Two Bobs, as they were knownin the industry, at a fishing lodge on the coast of Haida Gwaii.The area is famous for its Tyee (Chinook or spring salmon)weighing 30 pounds or more.

With Dickinson, Thiessen was on the dock before thecrack of dawn. By the end of the 16-hour day, he had beeninstructed on the finer elements of salmon fishing, includingbait evisceration, hooking, trolling, tidal movements, eddychannels, and the nocturnal and daytime routine and feedingregime of the Tyee salmon.

It was intense, it was detailed, it was tactical. Moreimportantly, it was designed for success, Thiessen recalls.

The next day, after a leisurely breakfast,Thiessen set out with Hunter in the generalvicinity of the other boats. He was surprisedwhen Hunter settled in for a nap, rod in hand,and asked if he was not worried about losingthe rod and reel if he got a bite.

No, was Hunters reply. He explained thatwhile he was napping, he was having wonder-ful thoughts and dreams that were being trans-mitted down the rod, down the line, throughthe hook, through the bait, and into the water tothe salmon. The Tyee are going to want my baitbecause its more desirable than anyone elses.

It was unique, intuitive and relaxed, and atthe end of the day, very successful, saysThiessen, explaining why he told this fishing taleduring the recent induction of Hunter and Dick-inson into the Canadian Mining Hall of Fame.

Its about two people who have beenuniquely successful employing very different

methods and approaches, yet completely compatible objec-tives. They had a singularity of purpose that made the wholegreater than the sum of its parts.

The best of both worldsIt all began in 1985, when two different men who had not

met were asked to run a company together. Dickinson, anacumenical entrepreneur-geologist with a business degree,was then 37 years old. Intuitive Hunter, a former top-produc-ing insurance salesman credited with financing and develop-ing the Cannon gold mine in Washington state as president ofBreakwater Resources Inc., was 58 at the time.

Within 10 minutes of meeting each other, we said, Okay,lets do it, Dickinson said. At that time, both had ended his-torical partnerships and were on their own. Despite a strongdesire to find mines, Dickinson had no real track record offinancing ventures, and Hunter, with no technical knowledge,had a rolodex of people wanting to invest in well-foundedmining ventures. Naturally, they realized they would be betteroff working together.

This was a time of heady growth for hundreds of newlyhatched junior companies, until the 1987 market crash andindustry downturn dashed their ambitions and drained theirtreasuries. But the stars lined up perfectly for the new part-ners. By 1990, they had sold interests in two British Columbiaprojects held by their junior companies to senior producersfor a total of $220 million a fortune at the time.

Hunter fought for the best deals for shareholders, negotiat-ing for 31 hours with Homestake Mining to win an extra dollarper share (to $5) for the sale of an interest in the Golden Bear

upfrontL E A D E R S H I P b y V i v i a n D a n i e l s o n

hdimining.com Courtesy of Hunter Dickinson International

Diverse tackleboxHow the Two Bobs shaped one of the worlds legendary mining companies

BOB H.BOB D.

RON T.

Hunter died in 2007, after a lengthy illness, but Dickinsonremains as chairman of the group, which operates on six con-tinents and has played a role in developing a dozen mines.

Built on a solid foundationThiessen says the resource sectors nuclear winter (the

late 1990s to 2004) provided opportunities, as well as chal-lenges.

While other juniors morphed into dotcoms, biotechs ordied, HDI continued to do what we had done historically;acquire under-appreciated assets at bargain prices, and man-age them judiciously until spring comes.

When spring finally came, starting in 2005, HDI hadassembled an impressive array of projects, including theGibraltar copper mine in British Columbia, the Hollister goldmine in Nevada, the Burnstone gold mine in South Africa,and various other projects, notably Pebble, Xietongmen andDetour.

Acquiring and operating mines is a departure from theearly years of the Hunter Dickinson team, when the goal wasto sell development-stage projects to senior producers. Butthis shift in strategy was likely necessary, given the pace ofindustry consolidation and reduced number of North Amer-ica-based major companies.

As for access to capital, the lifeblood of the industry,Thiessen says the relationships formed by the Two Bobswith financiers in Europe and the Middle East has allowedHDI to raise the funds it needs, even in lean times. Otherimportant assets, he says, are HDIs library of knowledge,portfolio of opportunity and intellectual capacity.

Unlike the early days, when the Hunter and Dickinsonlooked for opportunities mainly in the West, the expandedteam brings their knowledge to bear on diverse projectsaround the world. In addition, Thiessen says, We have theability to structure the deals, determine what the potential geo-logical outcomes will be and then raise the capital to do it.

Thiessen says HDI has both a bit of mystic and a realitygrounded in the real assets it represents a legacy of the intu-ition and tactical savvy that landed some big fish for the Two Bobs. CIM

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project near Dease Lake. In their next deal, the partners turneddown a bid by Noranda before selling the Mount Milligan cop-per-gold project near Mackenzie to Placer Dome.

By the early 1990s, however, the team faced challengesbeyond low metal prices and deteriorating capital markets.Golden Bear and Mount Milligan both failed to live up to theexpectations of their new owners. Other juniors worriedabout the potential domino effect on their undeveloped proj-ects. Conditions grew tougher as a series of 1980s-era mines Beaver Dam, Beacon, Golden Rose and Johnny Mountainamong others failed. It was an era when many juniors triedto become producers, usually too fast, and with too little min-ing experience.

Not one to fix things that are not broken, Hunter stuck tothe teams entrenched long-term strategy, telling reporters in1992 that he was not one bit worried about the future of theteams undeveloped projects in British Columbia, namely theKemess copper-gold deposit in the Omineca district and theFish Lake gold-copper deposit (now New Prosperity) in theChilcotin.

The majors have to stay in business, Hunter said at thetime. If weve got the orebodies, theyre going to want them.Its only a matter of time.

Hunters confidence in the desirability of his bait provedwell-founded in 1996, when Kemess was purchased by RoyalOak Mines. The property became a successful mine under thenext operator, Northgate Minerals Corp. The Golden Bearmine made a successful comeback during the early 2000sunder Wheaton River Minerals, whose $20-million treasuryattracted Ian Telfer and Frank Guistra to take over the com-pany and turn it into a fast-growing producer (later mergedwith Goldcorp). As for long-mothballed Mount Milligan, it isunder construction by Thompson Creek Metals and poisedfor production in 2013. New Prosperity continues to be achallenge on the permitting front but is being advancedtoward production by HDI-managed Taseko Mines Inc.

Sticking to its knitting paid off for HDI, which evolved intoone of North Americas most prominent mineral explorationand mine development groups, helped by rising metal pricesand demand from China and other emerging economies.

June/July 2012 | 29


When the Fraser Institute published its 2011/2012 Sur-vey of Mining Companies in March, the results sur-prised some observers. The small province of NewBrunswick had been named the worlds number one

destination for mining investment, outranking even Alberta(last years number one) and Finland in the survey of 802exploration, development and consulting firms. NewBrunswick ranked only 23rd the year before.

The province was already known for its diverse geology andits decades of prior mining development, but conversationswith those on the ground suggest there is more to its popularity.Newcomers remark that the people of New Brunswick fromlocal government to neighbours are more than open to min-ing investment. A small and close-knit group, familiar withmining and hard-hit by the disappearance of forestry, NewBrunswickers are ready to engage with potential developers.

Everything in one placeFrom a mineral point of view, New Brunswicks value as an

exploration site is long-established. Alongside potash, iron, gasand precious metals, volcanogenic massive sulfide deposits inthe north have kept the Bathurst mining camp producing zincand other base metals since the 1950s.

Geology was the first draw for Northcliff Resources, whichrecently took control of a tungsten-molybdenum deposit in centralNew Brunswick. Chris Zahovskis, president and CEO, explainsthat a large, near-surface deposit of tungsten in a time when Chinacontrols most exports of that commodity is valuable in itself.

Fantastic infrastructure sealed the deal, says Zahovskis,pointing out that a similar project in a different part of the

upfrontJ U R I S D I C T I O N S b y E a v a n M o o r e

fraserinstitute.org

Efficiencies of (small) scaleWhy New Brunswick is looking so good this year

world could cost hundreds of millions of dollars ininfrastructure development.

Sam McEwan, assistant deputy minister of naturalresources in New Brunswick, agrees that existingamenities make development attractive. Land is veryaccessible for exploration because of the forest indus-try, he explains. We have a labyrinth of roadsthroughout the province. We are on the coast withyear-round ports available for the shipment of our min-eral products. We are also directly adjacent to what isprobably one of the largest consumers of mineral com-modities in the world New England, United States.

Infrastructure was only one of the indicators put-ting New Brunswick ahead in the Fraser Institutesurvey: respondents reported clear regulations,political stability and good conditions for socio-economic agreements as well.

Mining is a mature industry in New Brunswick,such that the regulatory regime that has evolvedhere is not only robust in terms of providing ade-

quate protections for the environment, workers and communi-ties, but also clear and consistent, Zahovskis says. Coming into the province, you know the playing field, and the regulatorswork very hard to ensure that the rules are enforced in a strin-gent, but also consistent and predictable way. As a mine devel-oper, you cant ask for anything more than regulatory certainty.

Prospective miners are encouraged to schedule an informalmeeting with the Standing Committee on Mining and the Envi-ronment, composed of at least five members from the provin-cial Department of the Environment, Department of NaturalResources, and Environment Canada. Created in 1988 to avoiddepartmental overlap, this committee serves as a one windowaccess to the mine approval process, offering feedback andongoing access to the provincial reviewers that project propo-nents will be working with.

A certain warmthI would have to say the main reason we ended up as num-

ber one and why were viewed highly by industry is the servicethat they receive from the minerals staff at the Department ofNatural Resources, says McEwan. The people I work with, Icant say enough about what they do. Ive seen these folks inaction for many, many years, and they work very hard to meetthe needs of our clients, ensuring that they get the informationand service necessary for their projects.

McEwan points out that the already-small world of mininggets even smaller in a province like New Brunswick. Every-body seems to know everybody and more or less gets along,he says. We appreciate where industry is coming from, and Ithink they develop an appreciation for where we are coming

The geography of New Brunswick from Mount Carleton Provincial Park, near one of the provincesmining districts

Courtesy of New Brunswick Tourism

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from as well. We do have a job to do and our objective is to seeprojects proceed, while ensuring that they are meeting all theterms of our legislation. We are not trying to find ways to pre-vent their projects from moving forward. Instead, we prefer towork with companies and the public to find solutions to issuesthat may impact the feasibility of a project.

It is really one of the priorities of the government to encour-age investment, agrees Stewart Brown, general manager ofPotashCorps New Brunswick division.

And it is not just the government of New Brunswick that iswilling to work with mine proponents;Zahovskis reports stakeholders in North-cliffs Sisson project readily participate inplanning discussions. Theres a certainwarmth, if I can use that word, heremarks. Stakeholder engagement is reallyappreciated and welcomed. I dont knowwhether its the province that were in, or itsjust the nature of the people, but when wereach out, the effort is well-received.

Trevali Mining Corporation, currentlydeveloping an advanced-stage zinc-lead-sil-ver-copper project in the Bathurst camp, hasbenefited from the friendly environment.Our experience has been fantastic, saysSteve Stakiw, manager of corporate commu-nications. Dealing with government, fromprovincial to municipal, and also with theMikmaq First Nations, has been exemplary.We are very, very happy to be working there,and its been a real pleasure.

Not doing anything differentNew Brunswicks financial condition

invites new investment. While smallprovinces can be well-connnected, gener-ating solidarity and efficient governance,they also suffer when their primary indus-tries go south. With a forest industry inlong-term decline, the province has highunemployment (10.2 per cent as of April),debt of over $10 billion, and a disappear-ing workforce drawn to better prospectselsewhere. Stakiw reports a plethora ofskilled workers who would rather stayclose to home than move to Alberta.

If those workers fortunes change, itwill be due to commodity prices. Thezinc-focused Bathurst camp suffered fromlong-term oversupply, which is predictedto reach equilibrium only in the next fewyears as world-class operations winddown. Stakiw has seen a rising number ofexploration companies working in NewBrunswick, attributable in part to a fore-casted rally in zinc prices.

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cim magazine june/july 2012

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