mining quarterly winter 2011

Ross Andreson/Mining Quarterly

Core drillingAt Fire Creek

Silverio Lara knocks ore core out into a tray at American Drilling’sunderground platform at Klondex Mines Ltd.’s Fire Creek Project.

PUBLISHED BY THE ELKO DAILY FREE PRESS

QQUARTERLYUARTERLYWinter 2011-2012

WINTER 2011 ELKO DAILY FREE PRESS, Elko, Nevada 1

ELKO — Mining and drilling compa-nies in Nevada’s gold country continue tosearch for workers, and mining opera-tions in other states are advertising inNevada in hopes of enticing experiencedpeople away from the state in the currentboom.

The job openings are a contradiction tomuch of the rest of the nation, wherethere are far fewer jobs thanpeople looking for them.

Many urban Nevada resi-dents, however, still don’t graspthe significance of jobs in aneconomic downturn. Instead,they look at gold mines as thegolden tax egg and hope themines fork up more tax dollarsfor cash-strapped Nevada.

The mining industry says itpays plenty and doesn’t want tobe singled out, but the Pro-gressive Leadership Alliance of Nevadaplans to push the Nevada Legislature —and then voters — to approve a constitu-tional change that would do away withthe 5 percent net proceeds law and let theLegislature decide how to tax mining.

More on the tax debate is inside.The mining industry also is fighting a

proposal at the national level from theCongressional Super Committee. The“Dirt Tax” would be based on the tons ofmaterial displaced during mining opera-tions.

The tax would start at 7.8 cents per tonbut could be increased later, according tothe National Mining Association.

“It would be devastating,” said LauraSkaer, executive director of the North-west Mining Association.

For those who don’t have the skills yetfor the mining jobs and students lookingat what they want to do when they grad-uate, Great Basin College offers coursesto meet the demands of the mines, andmining companies contribute scholar-ships to make it happen

An article on one of GBC’s “MiningRocks” tours appears inside this edition.

Employment agencies also are busyproviding temporary help to the mines,and the Mining Quarterly takes a look atwhat they have to say in an article insidethat follows one appearing a year ago.

Another article looks at what BarrickGold of North America, NewmontMining Corp. and others are doing to

recruit workers.The available jobs are attracting

people from out of the area and out ofthe state, so there continues to be ahousing shortage in the mining commu-nities of Nevada. The price of gold andthose jobs attract news coverage fromout of state, as well.

National Public Radio aired a podcastin November in which Elko wasdescribed as a “town rolling inmoney.”

The reporters also said theyfound an undercurrent of anx-iety in Elko as the busy minersfeared their jobs wouldn’t lastdue to the boom-and-bustnature of mining.

Mining companies are plan-ning, however, to be in Nevadafor years to come, especiallywith the price of gold contin-

uing to shine.For instance, Newmont’s Phoenix

Mine’s Copper Leach Project is sched-uled to have a long life. Barrick’s BaldMountain Mine is looking at moreexpansion, and Round Mountain GoldCorp. is developing Gold Hill and eyeinga new long-term mining project.

Also, Yukon-Nevada Gold Corp.’sJerritt Canyon Mine started mining SSX-Steer, continues mill improvements andplans to do open-pit mining at old sites,along with starting a new undergroundmine at Starvation Canyon.

Quadra FNX Mining is looking atgoing into the Liberty Pit to extend thelife of that mine near Ely, and KlondexMining’s new Fire Creek undergroundproject could provide years of goldmining.

Nevada Copper is expecting to beginsinking a shaft soon at its PumpkinHollow Project on the outskirts of Yer-ington.

Moving away from the traditionalmetals, American Vanadium is planninga vanadium mine in Eureka County thatwould be one of the first in the world.

Stories on these operations also are inthis Mining Quarterly.

———————Adella Harding is editor of the Mining

Quarterly and mining editor for the ElkoDaily Free Press. Mining news is on the

elkodaily.com website. Her emailaddress is [email protected].

Booming industry strugglesto find skilled employees

AAddeellllaaHHaarrddiinngg

— INSIDE —BALD MOUNTAIN

Looking at future growth— Page 2

ROBINSON MINEBreaking production records— Page 12

PHOENIX MINEPlans to leach copper— Page 22

JERRITT CANYON Mining at SSX-Steer— 2

MINING ROCKSShowing Goldstrike to students— Page 51

Find the jobyou want

— Pages 85-87Employment

MINING QUARTERLYJohn Pfeifer. . . . . . . . . . . . . . . . . . . . . . . PublisherAdella Harding. . . . . . . . . . . . . . . . . . . . Editor

To advertise, call 775-738-3118

Mining Quarterly is published in March,June, September and December by the Elko Daily Free Press (USPS No. 173-4320)at 3720 Idaho Street, Elko, Nevada 89801, by Lee Publications Inc., a subsidiary of Lee Enterprises.

Periodical postage paid at the Elko Post Office. For change of address write 3720 Idaho St., Elko NV 89801

2 MINING QUARTERLY, Elko, Nevada WINTER 2011

BByy AADDEELLLLAA HHAARRDDIINNGGMining Quarterly Editor

ELKO — Now that Barrick Gold Corp.’sBald Mountain Mine is in full swing withcompletion of a major expansionproject, Barrick is planning for the nextexpansion that will boost Bald’s minelife.

This one calls for mining again atAlligator Ridge and Yankee, mines thathave been long closed, as well as theclosed Casino/Winrock Mine and atassorted pits throughout the 250-square-mile property south of Elko inWhite Pine County.

“With the new plan of operations willbe another expansion. Almost all of itwill be expansion of existing pits andrebuilding infrastructure,” said Bald

Mountain General Manager Dave Mc-Clure.

“Bald Mountain will have 20-plusyears,” he said.

The current expansion that was com-pleted at the end of September and led toa doubling of the workforce and will leadto expected gold production of roughly200,000 ounces a year will keep BaldMountain busy for some time.

“We’ve pretty much grown to the levelwe will stay until we’re permitted for thenext expansion,” McClure said.

And Bald did grow.“We are at 360 employees, about

double two years ago,” McClure said.“Production capacity is about two and ahalf times what it was a year or two ago.”

A 240-ton Komatsuhaul truck in theforeground awaits itsturn for a load in theTop IBX Pit at BarrickGold Corp.’s BaldMountain Mine as aP&H electric shovelscoops material andtwo haul trucks waiton each side for aload.

Ross AndresonMining Quarterly

Bald looks aheadto new expansion

See BBAARRRRIICCKK,, page 3


Ross Andreson/Mining QuarterlyBald Mountain Mine General Manager Dave McClure checks out the new process plant atMooney Basin. One track of tanks is to the left over his head.

Barrick ...Barrick reported Bald Mountain pro-

duced 26,000 ounces in the thirdquarter, more than double the 12,000ounces of production in the third quarterof 2010, and total cash costs were downto $535 per ounce from $704 last year.

McClure said production will con-tinue to increase over the next two or

three years and stabilize at roughly200,000 ounces a year.

NNeexxtt eexxppaannssiioonn ppllaannssBald Mountain filed the plan of opera-

tions for the next expansion with theU.S. Bureau of Land Management’s Ely

CCoonnttiinnuueedd ffrroomm ppaaggee 22



AABBOOVVEE:: JoeyMortensen, a metal-lurgist at BarrickGold Corp.’s BaldMountain Mine,holds a handful ofcarbon in the newprocess plant. Thebig sacks containcarbon.

A P&H electricshovel dumps a loadof material into a240-ton Komatsuhaul truck in thePhase I area at theTop Pit at BarrickGold Corp.’s BaldMountain Mine inNovember as an-other truck waitsfor a load.


District on Oct. 5, according to MilesKreidler, mining engineer and mininggeologist for the BLM’s Egan Field Officeat Ely.

The expansion will require an envi-ronmental impact statement.

“There are two plans, one for thesouth and one for the north, but it will beone EIS,” Kreidler said.

The BLM is estimating the permittingprocess will be completed with a recordof decision in June 2014, he said.

The south expansion will include thecurrent Alligator Ridge and Yankee pitsthat are in reclamation now, as well asthe addition of new pits. The northexpansion includes Casino/Winrock 10miles south of the Ruby Marshes and anew pit called Duke. Then there is RedBird, which is closer to present opera-tions.

“Really, there will be 16 depositsmined,” McClure said.

A transportation corridor is plannedbetween the north and south areas, butMcClure said those working at AlligatorRidge will access that area closer to Ely.That area will have a leach pad, wastedumps, shop, office space and a processplant.

“It will be administered as one largemine complex, but operationally it willbe almost a separate entity,” he said.

USMX Inc. mined Alligator Ridge andCasino/Winrock, but they closed in theearly 1990s. Placer Dome acquired thesites to consolidate Bald Mountain.

Alligator Ridge is about 12 miles southof the new process plant at MooneyBasin and about 20 miles from theadministration offices at Bald.

Bald Mountain is a little different thana number of mines that are focused onone large open pit or open pits within ashort distance of each other. The manypits are scattered and vary in size fromsmall to quite large. Top Pit, where theaction is now and will continue, will bethe largest.

“Top will be nearly as big in time asBetze-Post,” McClure said, referring tothe giant open pit at Barrick’s GoldstrikeMine north of Carlin.

“There will be 70 to 80 percent of orecoming from Top for 17 to 18 years,” hesaid.

MMiinniinngg aatt TToopp PPiittNow, mining is focused on Top Pit,

and McClure said operators are mining

Barrick ...CCoonnttiinnuueedd ffrroomm ppaaggee 33



Ross Andreson/Mining QuarterlyBald Mountain Mine General Manager Dave McClure smiles as he talks about hismemories of 37 years in the mining industry.


ELKO — “This is the best job in the world,”said Dave McClure about his work as generalmanager of Barrick Gold Corp.’s Bald MountainMine south of Elko in White Pine County, aposition he has held for the past six years of his37-year mining career.

McClure has been the general manager at Baldduring a major expansion project and is on theground floor of another expansion project thatwill continue to add mine life to Bald, a plan tomine again at older mines on the property.

He also was chosen as the Nevada MiningAssociation’s general manager of the year andreceived that honor during the safety awardspresentations at the September convention.

McClure said he is happy with his present joband prefers the stability to so much travel whenhe worked as a geologist and later on the corpo-rate side for Barrick.

He said he started in the mining field as anexploration geologist in the mid-1970s, work-ing in Washington, Idaho, Montana, Oregon,

California and Nevada.“I actually did that for 10 years before

moving to the mine side.”The Idaho native said his first job out of

school was uranium exploration “prior to ThreeMile Island. Other than the two or three years inuranium, I was in precious metals, working thegrassroots stuff to drill rigs, the whole gambit.”

McClure said he went to the mine sidebecause he had a young family at the time andwanted to be home more and have more sta-bility.

“It was absolutely the right decision,” Mc-Clure recalled.

His first mining job was with HomestakeMining Co. at the McLaughlin Mine in Cali-fornia beginning in 1985 when the mine was“just starting up.” He stayed there three years.

“Then I took a job at the Colosseum Mineoperated by Bond International Gold,” McCluresaid.

That mine southwest of Las Vegas in Califor-nia changed ownership when Lac Minerals Ltd.

McClure enjoys managingBald Mountain Mine

See MMCCCCLLUURREE,, page 8

acquired Bond International, and themine closed in 1993.

BBuullllffrroogg MMiinneeMcClure said he transferred in about

1990 to Lac’s Bullfrog Mine, “where Itransitioned from the technical side tothe management side.”

The Bullfrog Mine near Beatty insouthern Nevada started out as a surfacemine, but Bullfrog developed an under-ground mine in about 1995. Barrickacquired Lac Minerals in about 1994,including Bullfrog.

“I started out as chief geologist, thenmine superintendent, then general man-ager,” said McClure, who stayed thereuntil the mine’s closure.

Mine closures are hard but part of thebusiness, he said.

“And then I spent four years in corpo-ration positions with Barrick,” he said, inthe procurement and supply chain andthen as director of safety and health,working about half that time in Salt LakeCity and half in Toronto.

He traveled to Barrick operations inSouth America, Australia and Africa.

“Then, I was very, very glad to get backto the operating side,” McClure said.

He went to Barrick’s Goldstrike opera-tions north of Carlin as the undergroundmanager at the Meikle Mine from 2003 to2006 and was then the open pit managerfor a short time until Barrick acquired theBald Mountain Mine in its acquisition ofPlacer Dome Inc.

“As soon as that occurred, I camehere,” McClure said during an interviewat the mine.

He said Bald Mountain was just addingreserves when he arrived and had juststarted planning the expansion thatstarted in February 2010, after 42-43months of a permitting process with theU.S. Bureau of Land Management.

“I’ve enjoyed every aspect of my career,but Bullfrog and Bald Mountain are thetwo places that stand out,” he said.

CChhaannggeess oovveerr yyeeaarrssMcClure has seen a lot of changes in

the mining industry in his years in thebusiness, and he said one of those signif-icant changes has been the heightenedawareness of safety and health in theworkplace.

“It is really a self awareness of the haz-ards. Certainly I think you need the basichealth and safety systems, but empow-ering the people to make safety a pri-ority” makes the difference in the longrun, McClure said. “Historically, peopleweren’t encouraged to work safely.”

Now, companies make safety a part oftheir incentive programs, and that helps,he said.

“Bald Mountain is like a lot of mines inNevada that over the course of the last sixto eight years have seen a significant pro-gression in safety and health perform-ance,” McClure said.

He said similar changes have happenedon the environmental stewardship side.

“We do things correctly from the envi-ronmental standpoint,” McClure said.

He said miners don’t want to damagethe environment and do more on a dailybasis than most do to improve the envi-ronment, but it would be better to put theword “pragmatic” in front of environ-mentalist for miners.

The application of technology in theindustry has been another change, but hesaid the industry lagged behind until thelast 10 to 15 years when the effort in-creased to apply advancements tomining, “not just to make it safer butmore economical.”

The technology has made a differencefor geologists too.

“Technology is so much different nowwhen applied to the science of geology. Iwould have to go retrain. I haven’t lostmy love for geology, but it’s just not anarea of focus right now,” McClure said.

The size of the equipment also hascontinued to grow. McClure said a bigtruck was a 100-ton one or 150-ton, cer-tainly not the 400-ton trucks of today.And trucks didn’t have dispatch systems,just radios.

Mining also has come under a muchhigher degree of scrutiny over the years,and the number of stakeholders hasincreased significantly, “but that’s OK.That’s part of the business now,” he said.

The price of gold also has run thegamut over the years McClure has been inmining. He was working in the industrywhen the price was as low as $250 anounce and has seen it hit the highs thisyear of $1,800 an ounce.

On the home front, McClure said hefirst came to Elko to live in 1987, and heenjoys playing golf with his wife, Marcia,and spending time with his daughter andtwo grandchildren. He also likes to read,especially history, and he said he collectsfrog figurines as a result of his years atBullfrog.


McClure ...CCoonnttiinnuueedd ffrroomm ppaaggee 66

roughly 6 million tons a month of oreand waste rock.

The ore is placed on a leach pad sevenmiles from the pit, and the solution fromthe pad goes to the process plant.

The new process plant at MooneyBasin was built as an automated carbon-in-column operation that has two car-bon trains, although one of them wasn’tyet in use in November.

“It can run 10,000 gallons per minute,but is running about 4,000 gpm. We’rebuilding water inventory now,” saidmetallurgist Joey Mortensen.

The current expansion permit in-cludes mining the Numbers pits “prob-ably in 18 months to two years and thenSago. We will just stage the smaller pitsto coincide with mining at Top,” Mc-Clure said.

Bald is at high elevations, with Top at8,000 feet and the administrativeoffices, truck shop, assay laboratory andrefinery at 6,000 feet, McClure said inNovember. The mine also is low grade,with an average of 0.02 ounces per tonof gold.

“We will see very similar grades atAlligator Ridge. It will be low-grade,run-of-mine heap leach,” he said.

“Low-grade deposits are sensitive tothe gold price. That’s just the way it is.The cost of mining is to some degreefixed so we have to recover so much goldto cover those costs and investment andmake a profit,” McClure said.

The gold price is high now, running inthe range of $1,600 to $1,800 an ounce.

The project completed at the end ofSeptember included construction of anew truck shop, expansion of the assaylaboratory, construction of the processplant at Mooney Basin and a new fleet.

Bald Mountain has 20 new, 240-tonKomatsu haul trucks, as well as older240-ton Komatsu trucks and 190-tonand 140-ton Caterpillar for a 29-truckfleet.

BBaarrrriicckk ggrroowwtthh iinn NNeevvaaddaaToronto-based Barrick also high-

lighted future growth in Nevada duringits third-quarter earnings report withthe Red Hill and Goldrush discoveriesnear Horse Canyon at the Cortez Mineand extensive exploration at theTurquoise Ridge Mine.

Barrick has extended the strike lengthand intersected ore grades that supportan underground mine at Red Hill, themore advanced of the two sites, ac-cording to Rob Krcmarov, senior vice

president of global exploration.“It’s looking increasingly like the

deposits will merge,” he said of Red Hilland Goldrush.

Krcmarov said Barrick continuesdrilling at the two deposits, and drillingresults at Red Hill extended mineraliza-tion by 2,000 feet. Results from Gold-rush also are positive.

Barrick reported 264,000 feet ofdrilling were planned for this year at RedHill and Goldrush, and the drilling is 80percent complete.

Barrick will “scope out the extent ofthe entire system,” Krcmarov said.

He said the feasibility study processmay begin in 2013, and there will still bean extensive permitting process beforeRed Hill and Goldrush can becomemines.

At Turquoise Ridge, drilling is ex-panding resources, and undergrounddrilling has expanded new high-gradezones, Krcmarov said, with nine drillingrigs in operation on the surface andunderground.

Barrick is planning a large open pit atTurquoise Ridge, which is 75 percentowned by Barrick and 25 percent byNewmont Mining Corp.

BBaarrrriicckk pprroodduuccttiioonnBarrick’s companywide gold produc-

tion dipped slightly to 1.93 millionounces in the third quarter, produced attotal cash costs of $453 per ounce, com-pared with 2.06 million ounces in the2010 quarter at a total cash cost of $403per ounce, according to the earningsreport.

“The North American region con-tinued to perform well and on plan,”Barrick President and Chief ExecutiveOfficer Aaron Regent said.

He reported, however, that bothCortez Hills and Goldstrike in Nevadaare in higher strip phases at their openpits, which means lower production.

Nevada’s production in the thirdquarter was 836,000 ounces of gold,down from 929,000 ounces in the 2010quarter.

Cortez in Lander County produced353,000 ounces of gold in the 2011quarter at a total cash cost of $230 perounce, compared with 366,000 ouncesin the 2010 quarter at a total cash cost of$210 per ounce.

The Goldstrike Mine north of Carlinproduced 257,000 ounces in the thirdquarter at a total cash cost of $516 perounce, compared with 377,000 ouncesat $433 per ounce in the 2010 quarter.

The Round Mountain Mine in NyeCounty produced 51,000 ounces forBarrick’s 50 percent ownership at a totalcash cost of $574 per ounce, compared

with 49,000 ounces at a total cash costof $686 per ounce last year. Kinross GoldCorp. owns the other 50 percent ofRound Mountain and is the operator.

Turquoise Ridge produced 35,000ounces for Barrick’s 75 percent of theoperation at a total cash cost of $619 perounce, compared with 23,000 ounces ata total cash cost of $817 per ounce in the2010 quarter. Newmont Mining Corp.owns 25 percent.

Marigold Mine in Humboldt Countyproduced 13,000 ounces for Barrick’sone-third share at a total cash cost of$716 per ounce, compared with 8,000ounces at $614 per ounce last year.Goldcorp Inc. owns two-thirds of Mari-gold and is the operator.

Ruby Hill Mine in Eureka County pro-duced 28,000 ounces at a total cash costof $419 per ounce, compared with23,000 ounces at $699 per ounce lastyear.

Copper production totaled 140 mil-lion pounds in the third quarter at a cashcost of $1.91 per pound, with the addi-tion of 75 million pounds from Lum-wana Mine in Zambia, compared with84 million pounds in the 2010 quarter.

Barrick reported the company re-mains on track for gold production ofbetween 7.6 million and 7.8 millionounces for this year at a cost of between$460 and $475 per ounce.

Copper production will be between450 million and 460 million pounds thisyear, however, down a bit from the orig-inal forecast of 455 million to 475 mil-lion pounds at a cash cost of between$1.60 and $1.70 per pound.


Ross Andreson/Mining QuarterlyA 240-ton Caterpillar haul truck pauses for a dash of lime on its way to the leach pad in MooneyBasin at Bald Mountain Mine.

Barrick ...CCoonnttiinnuueedd ffrroomm ppaaggee 44

Ross Andreson/Mining QuarterlyAn Atlas Copco drill works in November on abench of the Top Pit at the Barrick Gold Corp.’sBald Mountain Mine in White Pine County.



RUTH — Quadra FNX Mining Ltd.’snew general manager of the RobinsonMine just outside the historic town ofRuth and near Ely is enthusiastic aboutthe mining records at the copper mineand production rates at the mill.

“We set production records in Sep-tember of 284,000 tons in a 24-hourperiod in the Ruth Pit and the mill,48,500 tons per day,” said Cary Brunson.“In October, we set another productionrecord of 302,000 tons in a 24-hourperiod.”

The record was broken again in earlyNovember, with 312,000 tons mined onNov. 4 and 400,000 tons on Nov. 5.

“In the past two and a half monthswe’ve just ramped up from averagingunder 200,000 tons,” said Brunson, whotook over as general manager in lateAugust when Joe Landon retired.

Currently, Robinson crews are miningin the Ruth Pit and starting the EastRuth Pit, which will share a high wallwith Ruth, but Quadra FNX also islooking to mine again at the Liberty Pit.

“We’ve done extensive exploration atLiberty. We’re hoping to see an additionto the mine life with it. Our goal is to ex-tend the life past 2021. It’s now at 2016,”said Brunson, who has been back atRobinson since July 2004 after earlierworking for Magma Copper and thenBHP at Robinson from 1995 to 1999.

Quadra FNX reported in November inits third-quarter earnings report that anew Liberty resource estimate is ex-pected by the end of this year.

Liberty is located between the Tripp-Veteran Pit that Robinson finished min-ing last year and the Ruth Pit. All of thepits have been mined in the past on thesite where Kennecott started large-scalemining, for the times, in 1908.

Brunson attributed about 20 percentof the recent higher mining rate to theaddition of five 240-ton Komatsu haultrucks that had been at Quadra FNX’sCarlota copper mine in Arizona. Mud re-moval at the bottom of the Ruth Pit alsohelped, as did completion of a secondaryramp out of the pit.

Better utilization of mining equipmentto shorten waiting times for trucks at theshovels also makes a difference, Brunsonsaid. Wait times have been trimmed from

Robinson breaks production records

AABBOOVVEE:: Loaded Caterpillar haul trucks climbthe grade leaving the Ruth Pit in November atQuadra FNX Mining Ltd.’s Robinson Mine inWhite Pine County.

LLEEFFTT:: Cary Brunson, left, general manager ofthe Robinson Nevada Mining Co., talks inNovember with dispatcher Michael Barraganin the mill.


See RROOBBIINNSSOONN,, page 14


seven minutes to two minutes, on average.The trucks also are taking tighter turns

to boost efficiency, according to produc-tion analyst Latham Hendrix, who hasbeen at Robinson since 2007, when hechanged careers from retail man-agement.

“It’s the little things you don’t thinkwill make a difference,” he said on a tourof the Ruth area, where he said his grand-father, Jack Hendrix, once mined under-ground.

The Robinson Mine also had to workthrough slope stability issues earlier thisyear, which affected mining rates.

Dewatering helped with the stability,Brunson said. Robinson dewaters about14,000 gallons per minute to keep Ruthdry and uses most of the water on site.

“To sum it all up, it’s success throughteam work,” Brunson said. “We expect itto be better next year, absolutely.”

PPrroodduuccttiioonn ttoottaallssVancouver-based Quadra FNX report-

ed Robinson produced 26.7 million

Robinson ...CCoonnttiinnuueedd ffrroomm ppaaggee 1122

See RROOBBIINNSSOONN,, page 15Ross Andreson/Mining Quarterly

Kristyna Fairley of Ely puts a sample tray in the oven in November in the metallurgy laboratory at Quadra FNX Mining Ltd.’s Robinson Mine.

pounds of copper and 9,200 ounces of gold in the thirdquarter, compared with 25.4 million pounds of copperand 15,300 ounces of gold in the 2010 quarter.

Production rose as Robinson crews mined highergrades at the bottom of Ruth, according to QuadraFNX.

The cash cost per pound of copper produced was$2.13 in the 2011 quarter, up from $1.66 in the 2010quarter, according to the earnings report.

Brunson said Robinson expects to produce 35,000ounces of gold for the year and 100 million pounds ofcopper.

Robinson also produces molybdenum as a by-product, and Brunson said Robinson expects to pro-duce 745,000 pounds of molybdenum this year.

“We’re actually doing pretty well on moly,” he said.“Moly flows with copper. If it is 0.2 percent or

higher we separate it,” said Tom Bender, the mill man-ager at Robinson.

Arlo Lott Trucking hauls the copper concentrate toQuadra FNX’s railport in Wendover, Utah, where it isput on train cars for shipment to Vancouver, Wash.There it goes on ships to be smelted overseas.

Brunson said roughly two dozen truckloads of con-centrate leave Robinson a day, operating 24 hours a dayseven days a week. Ten-12 people work for Quadra FNX


Robert Thompsondrops a cup ofslurry into a buck-et in November tocheck density inthe mill at QuadraFNX Mining Ltd.’sRobinson coppermine.




Robinson ...



See RROOBBIINNSSOONN,, page 17Ross Andreson/Mining Quarterly

The SAG mill at right and ball mills are turning at Quadra FNX Mining Ltd.’s Robinson Mine mill near Ely.

at Wendover, where they load each unittrain with 12,000 tons of copper.

RRoobbiinnssoonn eemmppllooyymmeennttQuadra FNX employs 600 people at

Robinson, and there are roughly 100 con-tractors on site, Brunson said.

Robinson faces the same dilemma asmost other mines in the West, however.

“It’s hard to find seasoned miningengineers, metallurgists and geologists,”Brunson said. “We have several openingson the professional side and for mainte-nance people.”

The housing shortage in Nevadamining communities is also a problem forRobinson.

“When we try to bring people in, andthey start looking, it’s discouraging,”Brunson said.

Quadra FNX is building four modularhouses in Ruth now and has 10-12 studioapartments in Ely, he said, and plans tobuild a daycare center in Ely that will befree to employees as an added incentive.

Robinson ...




Robinson ...The Robinson fleet now includes 29

haul trucks, including 18 240-tonCaterpillar and five 240-ton Komatsuhaul trucks and six 150-ton Caterpillartrucks, a Bucyrus electric shovel, twoLeTourneau loaders and a P&H electricshovel that is being rebuilt.

“It will be back in operation before thefirst of December,” Hendrix said.

Exploration continues on the Rob-inson site, and Brunson said corporategeologists believe there may be potentialfor a super pit since all the deposits arebasically in a line.

Two exploration drilling rigs were onsite in November.

Safety is a sharpened focus at Rob-inson after the U.S. Mine Safety andHealth Administration did a specialimpact inspection in September thatresulted in 34 citations.

“One of my biggest objectives is tochange the way we think of safety. Wewant to be proactive. We’re going to do itbecause it is the right thing to do. We

Greg Adams, whocame to Quadra FNXMining Ltd.’s RobinsonMine from the compa-ny’s Carlota Mine inArizona, stands next toa LeTourneau loader inthe truck shop. He saidhe works on Komatsuelectric-drive trucks.





Robinson ...want to take care of employees, notbecause MSHA gives us citations. IfMSHA gives a citation, we deserve it,”Brunson said.

He said Robinson corrected all theareas cited in the inspection.

“We want to be seen as the safest minein Nevada,” Brunson said.

QQuuaaddrraa FFNNXX ffooccuussRobinson is one of Quadra FNX’s

major copper producers, and QuadraFNX’s president and chief executiveofficer, Paul Blythe, said in the third-quarter earnings report that the companywill be focusing on Robinson and theMorrison operations in Canada.

He said the company decided the bestway to profit maximum net asset valueand free cash flow is to optimize oppor-tunities at the two flagship operationsthat together contribute 85 percent ofoperating income.

“We have reviewed our other assetsand have concluded that, on a risk

Ross Andreson/Mining QuarterlyA Bucyrus electric shovel loads a 240-ton Caterpillar haul truck in the new East Ruth Pit in November at the Robinson Mine.

adjusted basis, we should wind downCarlota and Podolsky. We have also madesignificant changes to the mine plan forFranke, which will be focused on theChina Pit that is expected to have loweracid consumption rates,” Blythe said inthe earnings report.

Quadra FNX said in the earningsreport that due to limited explorationsuccess at Podolsky in Ontario this year,production is expected to cease once the2000 Deposit is depleted in late 2012.

At Carlota at Globe Miami, Ariz., thenew life-of-mine plan will focus onmining readily available oxide copper orefollowed by residual leaching, accordingto the report. The company will con-tinue to evaluate the leaching of sulfideore and the Edgar Deposit, however.

The company reported Carlota con-tinued with staff reductions and addi-tional measures to reduce costs duringthe third quarter in line with the newplan to keep a positive cash flow over thenext several years.

The five haul trucks that came toRobinson from Arizona were part ofdownsizing at Carlota, and some em-

ployees from there transferred to Rob-inson.

QQuuaaddrraa FFNNXX eeaarrnniinnggssAlso in the quarterly report, Quadra

FNX provided an update in its third-quarter earnings report on the outlookfor the copper market, stating that itbelieves the copper market fundamentalswill remain strong because of futuredemand and short supplies, but theremay be short-term price drops becauseof the slower economies in Europe andparts of China.

Prices fell 25 percent in September to a15-month low of roughly $3 per pounddue mainly to uncertainty in the Euro-pean markets, but the price for thequarter averaged $4.07 per pound.

The copper price was heading back upafter the quarter ended, with the averageprice at $3.40-$3.50 per pound in mid-November.

Quadra FNX reported net earningswere up more than 600 percent to $142.8million in the third quarter whileadjusted earnings totaled $52 million, or




Robinson ...

27 cents per share, in the quarter, com-pared with $35 million, or 18 cents pershare, in the 2010 quarter.

Vancouver-based Quadra FNX re-ported the earnings of $143 million, or 75cents per share, compared with $19.5

million, or 10 cents per share, last yearmainly due to non-cash adjustments forSierra Gorda in Chile, Carlota andPodolsky.

The adjusted earnings of $52 millionincluded a $293 million gain on a jointventure with Sumitomo for the Sierra

Gorda Project, partially offset by $238 inimpairments and inventory adjust-ments. Revenue was up 26 percent to$326 million in the third quarter, ac-cording to the report.

Total production in the quarterincluded 60 million pounds of copper

and 27,000 ounces of precious metals,compared with 57 million pounds ofcopper and 31,800 ounces of preciousmetals in the third quarter of last year.

The company also produced 3 millionpounds of nickel in the third quarter atits Canadian operations.



Robinson ...

LLEEFFTT:: Latham Hendrix ofLund, production analyst,talks about mining in theRuth Pit and the new RuthEast Pit.

RRIIGGHHTT:: Sarah Roman-Mar-quez of Ely checks the con-trols at the operating sta-tion for the filter plant inthe mill at the RobinsonMine. The plant takes themoisture out of the copperconcentrate to 6-9 per-cent. “This is the very endof the process,” said TomBender, the mill manager.



Ross Andreson/Mining QuarterlyDon Anderson dispatches haul trucks at Newmont Mining Corp.’s Phoenix Mine near Battle Mountain from a control roomin the administration building. Phoenix uses the MineStar dispatch system. The yellow spot on the top screen at left is theshovel also shown on camera at bottom left in the Glory Hill Pit.


BATTLE MOUNTAIN — Turning what had been waste rockinto copper production is just down the road for NewmontMining Corp.’s Phoenix Mine south of Battle Mountain.

“Turning waste into ore provides additional jobs in LanderCounty,” said Phoenix General Manager Joel Lenz.

The U.S. Bureau of Land Management’s Battle MountainDistrict recently released the draft supplemental environ-mental impact statement for the Copper Leach Project and istaking public comment through Dec. 12.

“I’m confident we will gain regulatory approval. Theproject is designed to the highest standards. This is a greatproject,” Lenz said.

“We will begin construction as soon as we have the recordof decision, sometime in 2012, hopefully sooner rather thanlater,” he said.

Actually, construction of the leach pad for the project isunder way under an earlier permit for a leach pad, but

PHOENIXPHOENIXMine busy with new projects

See PPHHOOEENNIIXX,, page 23


Ross Andreson/Mining QuarterlyMining equipment keeps busy in the F5 phase of the Fortitude Pit in November at Newmont Mining Corp.’s Phoenix Mine in Lander County.



Phoenix ...Phoenix can’t put ore on the pad untilBLM approval.

The first 20-foot lift for the leach padhad BLM approval back in 2002, saidDave Davis, team leader for the PhoenixProject for the BLM.

Starting the pad work in the latesummer allowed Phoenix to take advan-tage of the weather, Lenz said.

Construction of a processing plant forthe leached copper also has to wait.

Plans call for the processing plant to becompleted and in production in 2013.

“It will be a relatively small plant,about the size of a football field,” Lenzsaid.

The liner work that was nearing com-pletion in November for the pad covers 9million square feet, but the next twophases will more than double that size,he said.

Ames Construction is the lead con-tractor for the leach pad.

Lenz said engineering for the projectwas nearing completion in November,

and Newmont is placing orders forequipment for the project.

The Copper Leach Project had beenon the drawing board for some time,and Lenz said release of the draft EISwas a milestone.

WWoorrkkffoorrccee ooff 225500Once construction begins, there will

be a peak workforce of 250 contractors,and the project will create 50 perma-nent jobs to add to the 450 employeesnow working at the gold and coppermine that has a mine life of more than20 years, he said in a November inter-view.

“We’re in our fifth year of operationand continue to extend the mine lifeand replace reserves,” he said.

Lander County Commissionersvoted in November to send a letter ofsupport for the project to the BLMbecause of the economic benefits tothe county.

“In the first five years, we will pro-duce 20 million pounds of copper peryear,” Lenz said.

According to the BLM study, New-mont would recover roughly 245 mil-lion pounds of copper through theproject over the years.

Along with the work on the leachpad, Phoenix has contractors on sitefor a processing expansion thatinvolves adding new secondarycrushers “to improve our ability tohandle the hard rock at Phoenix,” Lenzsaid.

Phoenix also will be adding flotationcells at the mill to improve processing.

“We’ve got a lot going on,” Lenzsaid.

Work at the mill includes addingmore flotation cells, as well as thecrushers.

Schmueser & Associates was pour-ing the foundations for the crushers inNovember, but Lenz said Newmonthadn’t awarded a contract yet for theflotation cells. They will probably beawarded in December, he said. Thework should be completed by themiddle of next year.

Lenz said the new cells will be tied induring routine mill maintenance.

The project that includes the newflotation cells, a small building tohouse the cells and the secondarycrushers will cost about $75 million, hesaid.

Another Phoenix project under wayis the Phase 6 expansion of the tailsembankment, and N.A. Degerstrom isthe contractor on that project.

Lenz estimated there were 150 con-tractors on site in November for thetails pond work, crusher expansion andthe copper leach pad.

MMiinniinngg aatt FFoorrttiittuuddeeMeanwhile, the mining at Phoenix is

at the Fortitude Pit, in different phases,and at the Glory Hill Pit and at theBonanza Pit.

“But most of the production now isin the Fortitude Pit. It’s all one big highwall and layback,” Lenz said.

The material with copper ore minedfrom the open pits is stockpiled in aspecial area of a waste dump until theore can be put on the leach pad, but




Phoenix ...

Ross Andreson/Mining QuarterlyJoe Lenz, general manager of Newmont MiningCorp.’s Phoenix Mine near Battle Mountain, explainswhat Newmont plans at the new copper leach areaon the mine site.


Ross Andreson/Mining QuarterlyBlast-hole drills work in the F4 phase of the Fortitude Pit in November. Snow is visible in spots.



Phoenix ...earlier that lower grade copper ore was con-sidered waste.

The new plant for the leached copper willbe near the current mill, but separate. Thisplant will be a copper solvent extraction-electrowinning facility that will producesheets of 99.9 percent copper, Lenz said.

The sheets that will be between a halfinch and quarter inch thick and 3-feet-by-3feet will be shipped by truck or train for saleto a copper trader.

The copper concentrate from the currentPhoenix operations goes by train to theEstrada smelter in Quebec.

Despite all the copper mined, Phoenix is agold mine and copper is a byproduct.

“When you look at gold production, two-thirds goes with the copper concentrate andone-third ends up as doré bars,” Lenz said.

Although Phoenix expects to basicallydouble copper production with the CopperLeach Project, copper has a lower value thangold and silver, and gold will still provide 85percent of Phoenix’s revenue.

“We produce more copper, but the value

of the gold is much higher. Copper reallymatters too,” Lenz said.

Gold has been selling for roughly$1,700 to $1,800 an ounce, sometimesdropping below $1,700, while copper hasbeen selling at roughly $3.50 a pound,after slipping from more than $4 a poundearlier this year. Silver is in the range of$30-$40 an ounce.

LLaanndd ddiissttuurrbbaanncceeAccording to the draft supplemental

EIS, the Copper Leach Project will dis-turb 902 acres of public and private land.

“A lot of that has been disturbed,” saidDavis.

The Copper Leach Project pad is in anarea that hadn’t been disturbed before2005 but was disturbed later with thecollection of alluvial materials for recla-mation, Lenz said.

The area where the plant will be built isin an area disturbed before Newmontacquired the Phoenix property when itacquired Battle Mountain Gold Co. in2001, he said.

Because the project is “such a low-

profile project,” the BLM decided not toschedule the traditional open houses onthe draft supplemental EIS unless thereare requests, Davis said.

The main focus of concern for theproject was over long-term issues andclosure of the copper leach pad, accord-ing to Davis.

“It was one of the big driving issues,the closure of leach pads,” he said whenthe study was released.

Phoenix will use sulfuric acid to leachthe copper, and Lenz said the leachingwill all be contained. The pad is linedwith plastic and crushed rock.

“We put a lot of effort into addressingthose concerns, and we worked closelywith the BLM. Closure was what took themost time,” Lenz said.

The sulfuric acid solution is diluted topH 1.9 and then goes through the rockleaching out the copper minerals. Thesolution will then go to the process plant,where a solvent extraction process thatmixes the copper-bearing solution with akerosene base will produce a concen-trated copper solution. The copper willbe stripped out in an electrolyte solution

and then goes back to electrowinningcells, according to Lenz.

The kerosene solution will be recircu-lated.

This system has been in use since themid-1970s, starting in Arizona, and it

was used at Copper Basin at the Phoenixproperty from 1979 through 1984, whenDuval was processing copper at the site.

“I worked there from 1981 to 1984,”



Phoenix ...

Ross Andreson/Mining QuarterlyAn Hitachi hydraulic shovel dumps a load into the bed of a 240-ton Caterpillar haul truck in theF5 phase of the Fortitude Pit at Newmont Mining Corp.’s Phoenix Mine in Lander County. All thetrucks have safety slogans.

See PPHHOOEENNIIXX,, 28

Lenz said. He was the plant metallurgist.Exploration also continues at Phoenix

and Copper Basin to build resources andreserves, and Lenz said there were threedrill rigs operating in November.

LLoonnee TTrreeee pprroodduuccttiioonnLenz also oversees the Lone Tree Mine

near Valmy, where mining ended in late2005 but a rehandle leach project isunder way there.

“We’ve actually expanded the system,and we’re putting in a new pad. “It’sbecoming a nice little operation for us,”Lenz said. The leaching is producinggold.

Newmont continues to add lime to thepit lake formed at Lone Tree whenmining ended to reduce the pH of thelake, he also said.

The current mining fleet at Phoenixincludes 16 trucks, but Lenz said twomore trucks will be added by January.The current fleet is made up of 250-tonCaterpillar haul trucks, and the two to beadded are rebuilt 190-ton trucks.

Phoenix earlier tested a prototype 350-

ton Caterpillar electric diesel haul truckand is still evaluating the data, but“operators really liked that truck,” Lenzsaid.

Steve Johnson, mine manager at Phoe-nix, said the dispatching system for thetrucks is now in the administrationbuilding, rather than above the pits, butthere are cameras throughout the miningareas for the dispatcher to track trucks.

NNeevvaaddaa pprroojjeeccttssAlong with the Copper Leach Project

at Phoenix, Newmont is continuing con-struction work for the new EmigrantMine south of Carlin.

Production is expected from Emigrantin mid-2012.

Newmont President and Chief Ex-ecutive Officer Richard O’Brien alsoreported in the company’s third-quarterearnings teleconference that strippinghas started on the new Vista 7 Project atthe Twin Creeks Mine in HumboldtCounty.

Newmont also continues explorationand planning for a mine at Long Canyonin Elko County.

O’Brien said Newmont is looking atfiling a mining plan of operations forLong Canyon in mid-2012, which wouldtrigger permitting efforts with the BLMand state.

Gold production from Nevada opera-

tions in the third quarter totaled 428,000ounces, produced at a cost attributable tosales of $641 per ounce in the thirdquarter, down 6 percent from the 2010



Phoenix ...

See PPHHOOEENNIIXX,, 29

Ross Andreson/Mining QuarterlyTrucks are carrying overliner material to put on the new copper leach pad at Newmont MiningCorp.’s Phoenix Mine in Lander County. Ames Construction is the contractor for the project.

quarter due to lower mill grade oreprocessed, partially offset by higherleach placement and recoveries, ac-cording to the earnings report.

Newmont reduced production expec-tations from Nevada operations for theyear to between 1.7 million and 1.8 mil-lion ounces because of lower grades atGold Quarry north of Carlin due tosequencing, lower tonnage and gradesfrom the new Exodus underground minenorth of Carlin and the temporary lack ofaccess to the Chukar underground mineat Gold Quarry.

Chukar access has been restored.O’Brien said, however, that the com-

pany expects a strong fourth quarter inNevada, with more ore coming fromthe Pete Bajo underground mine northof Carlin, Exodus, Chukar and GoldQuarry.

NNeewwmmoonntt pprroodduuccttiioonnCompanywide, Colorado-based New-

mont still expects to meet its guidancefor gold production for the year ofbetween 5.1 million and 5.3 million

ounces at a cash cost of $560 to $590 perounce on a co-product basis.

Newmont’s gold production was down7 percent in the third quarter to 1.3 mil-lion ounces, compared with 1.4 million inthe 2010 quarter, according to the earn-ings report.

Copper production dropped 30 per-cent to 58 million pounds from 83 millionpounds. Newmont’s realized copperprice was down 20 percent to $2.94 perpound. Costs applicable to sales were$622 per ounce for gold and $1.10 perpound for copper.

For the third quarter, Newmont’s ad-justed net income was up 19 percent withhelp from high gold prices, but the com-pany’s net income from continuing oper-ations fell 8.2 percent because of write-downs.

The company’s adjusted net incomewas $635 million, or $1.29 cents pershare, up from $533 million, or $1.08 pershare, for the 2010 quarter, but earningswith the impairment charges totaled$493 million, or $1 per share, comparedwith $537 million, or $1.09 per share, lastyear.

Newmont took $142 million in charges,mostly related to acquisition of FronteerGold in April based on a decline in valueof shares of Pilot Gold Inc. and PaladinEnergy Ltd. Pilot Gold was spun off fromFronteer in the deal and Paladin camewith Fronteer.

Newmont said Paladin lost value afterthe nuclear crisis in Japan because it is auranium producer.

Newmont’s key reason for acquiringFronteer was the Long Canyon Project.

Newmont’s revenue was up nearly 6percent to $2.7 billion for the quarter.


Ross Andreson/Mining QuarterlySchmueser & Associates Inc. is constructing the foundation on a late afternoon in November fora secondary crusher at Newmont Mining Corp.’s Phoenix Mine near Battle Mountain.


Phoenix ...


BByy JJOOHHNN LL.. DDOOBBRRAA

In 1977, Roy Jastram published“The Golden Constant,” whichshowed that, since the early 1700s,gold has maintained its purchasingpower. That is, to put in the simplestterms, an ounce of gold hasbeen able to purchase adinner for two in a goodrestaurant in New York orLondon, or a high qualityman’s suit.

History is a bit morecomplicated than that butJastram had a point. Goldhas also maintained itsvalue more than most majorcommodities.

A couple of weeks ago, Iwas talking to my principles of eco-nomics class about inflation andshowed them the U.S. Bureau ofLabor Statistics’ inflation calculator(http://www.bls.gov/data/infla-tion_calculator.htm). I used goldprices as an example.

In 1980, the price of gold hit $852— it closed at that on a Friday andopened there on the next Monday. Ininflation adjusted terms, the 1980peak price is equivalent to $2,346today, considerably above the Nov.13 price of $1,773 and the 2011 highof $1,895.

Both of the prices for this year areLondon PM fixes, which are alwaysbelow the futures prices that getquoted widely in most media out-lets.

The average price for 1980 wasaround $610. In today’s dollars,that’s the equivalent of $1,680. Notmuch different than today’s price.

On the other hand, if you hadinvested your ounce of gold, worth$852 in 1980, in the S&P 500, youwould have earned an average returnof about 7 percent, and today youwould have $6,940. So, there is lotto be said about the “GoldenConstant” — but there is also a lot to

be said about the power of com-pound interest!

A big issue is being made today inTV and print commercials aboutinvesting in gold. I'm not discour-aging gold investment — there is the“Golden Constant” to consider. But

you also have to considerthe power of compoundinterest. Gold is a safeinvestment in the long run,but so is bomb shelter inyour basement. The realquestion is how much doyou want to spend on thebomb shelter?

Individual investors likeyou and me should want todiversify our investments,and gold is a good way to dothat for your 401(k) or

whatever retirement plan you have.Gold is a good defensive investmentbecause of the “Golden Constant,”but as the numbers should show you,it’s not going to make you rich. Itwill save your money in a meltdown— but I'm not predicting that.

For your information, I do not owngold except jewelry (mainly mywife’s) — some of which is bullionjewelry (a better purchase than the14 carat stuff). A significant part ofmy income comes from the goldindustry, so I see no point in going indeeper. I diversify and invest inbonds.

I also own some gold stocks, andI’ve done very well at that, thanks toNevada miners. Gold stocks, espe-cially small company stocks, havethe greatest leverage to the goldprice. That has an upside and adownside, so you have to do yourhomework.

———————Dr. John Dobra is the director of

the Natural Resource IndustryInstitute and an associate professor

of economics at the University ofNevada, Reno.

John Dobra

Precious metal still‘The Golden Constant’

VIEWPOINT


Arnold Romeroof Elko drives anew 30-tonSandvik haultruck out of theportal at theJerritt CanyonMine’s SSX-Steerundergroundoperation on Oct.3, the first officialmining day atSSX-Steer.

Adella HardingMining Quarterly

Jerritt Canyon ramping up at SSX-SteerBByy AADDEELLLLAA HHAARRDDIINNGG

Mining Quarterly Editor

ELKO — Yukon-Nevada Gold Corp.’s Jerritt CanyonMine north of Elko continues on a growth path thatalready has added ore production at the SSX-Steer Mineand aims for new surface mining, as well as developmentof the Starvation Canyon underground project.

“At SSX, we’re getting ore now but still ramping it up,”said Yukon-Nevada Chief Operations Officer RandyReichert.

Jerritt Canyon will be getting deliveries into January tobuild the mining fleet at SSX-Steer so the undergroundmining will increase as more equipment arrives on site,he said in November.

Yukon-Nevada also is working on engineering andestablishing the gold resources at Burns Basin and for theSaval and Pie Creek pits, where the company hopes tomine again.

Reichert said the company has identified a push backand possible deepening at the Burns Basin Pit and wouldbe seeking new permits to mine there.

Jerritt Canyon has been strictly underground for anumber of years, but the large claim block includes anumber of pits that Yukon-Nevada is looking at mining

See JJEERRRRIITTTT,, 33

again, especially now that the gold priceis high.

Reichert said the resource identified atBurns Basin at a gold price of $1,400 anounce already has nearly doubled withthe price in the range of $1,700 an ounce.

Along with the new mining at the SSX-Steer operation, mining continues at theSmith Mine, where Small Mine Develop-ment is the operator and is back up toproducing 1,000 tons of ore a day.

Starvation Canyon at the south end ofthe Jerritt Canyon property will be anunderground mine, and one of the firststeps is building a new road from theTuscarora Road to the site.

“It would have been nice to get a roadto the site this fall, but it was delayed,”Reichert said.

Starvation is on private property, andJerritt Canyon has the state permits inplace for mine development.

Yukon-Nevada said current plans areto begin development work at StarvationCanyon in the third quarter of next year,with production to begin in January 2013.

GGoolldd pprroodduuccttiioonnJerritt Canyon already is producing

gold from the Smith underground minethat Small Mine Development operatesand from ore stockpiles, as well pur-chased ore from Newmont Mining Corp.

Yukon-Nevada reported Jerritt Can-yon shipped 21,296 ounces of gold in the

third quarter from purchased ore, stock-piles and mining operations, comparedwith production of 17,202 ounces in the2010 quarter.

The purchased ore from NewmontMining Corp. totaled 90,911 wet tons inthe quarter containing 9,835 ounces ofgold at an average cost per wet ton of$115, according to the report.

Production from the Smith Minetotaled 14,893 ounces from 87,330 tonsthat contractor Small Mine Devel-opment delivered to the mill during the2011 quarter at an average cost of $645per ounce, Yukon-Nevada reported.

The company stated that productionin the 2011 quarter would have beenhigher except for rolling shutdowns atthe mill during winterization upgradesand for repairs. Yukon-Nevada expectsproduction to be down in this quarterbecause of a planned overhaul at the millat the end of November, when repairswill be done and the new winterizationsystem brought on line.

“Due to dryer manufacturing delays,that’s put us out to shutting down at theend of November. We’ve got quite a bit todo,” Reichert said.

The Jerritt Canyon mill-roaster facil-ity will have the ore-drying system at thebeginning of the cycle instead of later aspart of the winterization, and the con-veyor system has to be changed for fine


Yukon-Nevada Gold Corp.Construction continues on mill improvements at Yukon-Nevada Gold Corp.’s Jerritt Canyon Minenorth of Elko. This view shows the baghouse and gas scrubbing for it.


Jerritt ...


crushing as part of the update. A newdirect-control system also will beinstalled in the mill.

“It’s a high level of automation,” JerrittCanyon General Manager Guy Simpsonsaid in November.

Reichert said the upgrades will allowfor more efficient mill operations in thewinter months, and the new automationwill make the mill more efficient.

CCoonnssttrruuccttiioonn wwoorrkkContractors also are busy on site

working on upgrades at the mill andcompleting the new tailings dam andwater storage facilities. VT Constructionis the contractor working on the dam andwater storage facilities.

The Jerritt Canyon complex also con-tinues to add employees. Simpson said inNovember there were 250 employees,and SMD has 40 to 50 workers at Smith.He said earlier the goal is to have 300workers by the second quarter of 2012.

Mine Manager Mike Armuth has been“very successful recruiting. A bunch ofpeople have come back. People enjoy

Jerritt Canyon,” Simpson said in October.“It’s a bit of a family.”

He also said the company is looking atthe housing situation in Elko and how tofind housing for new workers, while alsoplanning to go to job fairs in about fourstates.

“We need miners, mechanics and elec-tricians,” Armuth said.

At SSX-Steer, mining officially beganon Oct. 3.

“There was a huge amount of work toget us where we are today,” Armuth saidat the time.

Mining ended at SSX-Steer in August2008 when Yukon-Nevada shut downJerritt Canyon due to financial troubles,but the mine now has new equipmentand will continue to boost production asmore equipment arrives and more minersand mechanics are hired.

“The consensus in the past was a lackof belief in our ability, but that’s not thecase. We’ve got strong technical, super-visory and operating teams. It’s veryexciting,” Simpson said on opening day.



Jerritt ...


Adella Harding/Mining QuarterlyKen Hirst, left, senior miner, talks with Toby Alt, who provides surface support for the SSX-Steerunderground operations at the Jerritt Canyon Mine north of Elko as they stand in front of thebackfill plant used for SSX-Steer.

“We fired the first ore blast on Thursday,and we’re mucking and trucking today.”

“SSX is the second mine at JerrittCanyon to be put back into production onschedule and on budget. Our technicaland operating teams are doing an exem-

plary job restarting the mines, provingthat Yukon-Nevada has the team in placeto advance production,” Yukon-NevadaPresident and Chief Executive OfficerRobert Baldock said in an announcement



Jerritt ...


Adella Harding/Mining QuarterlyDoug Sanchez, left, of Spring Creek, shop supervisor at Jerritt Canyon’s SSX-Steer operations,talks on Oct. 3 with mechanic David Beaudoin of Wildhorse about the new Rolbott boltingcarousel they mounted onto an older Tamrock bolter chassis.

Adella Harding/Mining QuarterlyYukon-Nevada Gold Corp. has new mining equipment for the SSX-Steer underground operationat the Jerritt Canyon Mine north of Elko. The equipment includes a Normet transmixer truck andshotcrete gear, a Caterpillar loader and a rebuilt Sandvik jumbo drill.



Jerritt ...


for the first day of mining at SSX-Steer.Plans call for mining 400 tons of ore a day in the beginning at SSX-

Steer and ramping up to 800 tons in the first quarter of next year andto 1,200 tons per day in the second quarter, Simpson said.

“I’m pretty confident we can beat that,” he said during a drive to theSSX site.

Jerritt Canyon started the SSX portal in 1996, and the Steer portaland facilities at that end were added later. The two are connectedunderground, and the latest figures show there are 229,200 ounces ofgold reserves there.

Armuth said the mining now is at the Steer side, but Jerritt Canyonis using the SSX facilities for the start-up because of more completeinfrastructure, including a backfill plant that was ready to go, afterrepairs and installation of a new computer and software.

There also is an orebody at SSX to develop later.Work started with a 30-ton Sandvik haul truck, a new Caterpillar

loader with a 6-cubic-yard bucket, new Normet transmixer truck andsprayer, as well as a rebuilt jumbo driller, but Simpson said two jumbodrills are arriving in December, and there are orders out for threeSandvik loaders and three Sandvik trucks.

Armuth also said one new Atlas Copco jumbo drill is coming Dec. 5and another one Jan. 7, and an Atlas Copco bolter was due to arriveNov. 15.

Exploration continues on site. Yukon-Nevada reported reverse cir-culation rigs mobilized to begin drilling at West Generator, Saval and Adella Harding/Mining Quarterly

Mike Armuth, left, mining manager at Jerritt Canyon, driver Arnold Romero and General Manager Guy Simpsonchat on Oct. 3, the first official day of mining at the SSX-Steer underground mine. Romero is driving a new 30-tonSandvik haul truck.



Jerritt ...East Dash, and a diamond drill wasmobilized to drill at Starvation Canyon.

EEaarrnniinnggss rreeppoorrttYukon-Nevada Gold Corp. reported a

net loss of $18 million in the thirdquarter, compared with a net loss of$103.8 million in third quarter of lastyear.

The net loss for the third quarter of2011 was due to a loss from operations of$11.2 million, $3.7 million in finance andtransaction costs and an $11.4 millionloss on derivatives offset by an $8.5 mil-lion gain in fair value of warrantsrecorded as derivative liabilities, ac-cording to the earnings report.

Yukon-Nevada stated it closed a $120million forward gold purchase agreementin the third quarter with Deutsche BankAG for the delivery of 173,880 ouncesover a four-year period beginning onSept. 30.

Proceeds from the agreement aremainly for improvement projects atJerritt Canyon and for new mining proj-ects, Yukon-Nevada reported.

Yukon-Nevada Gold Corp.This aerial view taken on Oct. 28 shows construction of the new tailings storage facility at Yukon-Nevada Gold Corp.’s Jerritt Canyon Mine north ofElko. In the foreground are two new water storage reservoirs and in the back is the tailings storage.



ELKO — The mining industry is gettinghelp with its efforts to reduce permittingtimes for its projects for job creation, andthe Nevada mining industry is promotingthe economic benefits it brings to thestate.

Sen. Dean Heller, R-Nev., proposed abill that would force the U.S. Bureau ofLand Management and Interior Depart-ment in Washington to spend no morethan 45 days on project proposals beforepublishing them in the Federal Register.

The 45-day limit applies after the stateBLM offices send proposals to Wash-ington.

“Nevada is fortunate to have resourcesin our own backyard that can provide jobopportunities, but job creators needaccess to them. By shortening the timethe Department of Interior has to com-plete certain administrative reviews, wecan reduce red tape in the permittingprocess and help new projects move for-ward in a responsible manner,” Hellersaid.

U.S. Rep. Mark Amodei, R-Nev., said inElko in November that streamlining per-mitting times is one of his priorities. He isa former president of the Nevada MiningAssociation.

Nevada Gov. Brian Sandoval wrote toPresident Barack Obama calling for fasterpermit times for mining projects thatwould provide jobs for struggling Nevada.

On the promotion side, the NevadaMining Association started a statewidecampaign in September.

“We’re using television to show ourside, primarily in Clark and Washoecounties,” said Nevada Mining Associ-ation President Tim Crowley.

He said the advertising campaigncalled “Mining for Nevada’s Future” alsofeatures billboards, banner ads online andnewspaper advertising, and the feedbackhas been positive.

“We just think there is a need. Wehaven’t done a good enough job of makingpeople aware of how we have evolved andgrown and what are contributions are tosociety,” Crowley said.

“The main concern is economic devel-opment, and we have such a grand storyto tell,” he said.

Crowley pointed to the economic ben-

efits when Coeur d’Alene Mines Corp.restarted mining at the Rochester silvermine in Pershing County that providednew jobs and more business for suppliers.

Crowley said mining isn’t even close tofilling in the gaps left with the downturnof the gaming and construction indus-tries in the state, but “it’s certainly beenhelpful.”

The industry has hundreds of jobsavailable, and the industry “is workingvery hard to find people to put in thosespots,” Crowley said.

He said the association started workingon the campaign before the ProgressiveLeadership Alliance of Nevada began itscampaign during the 2011 legislative ses-sion to find more revenue for the cash-strapped state by targeting the industry.

PLAN claimed success when theLegislature trimmed the deductionsmines can take on the net proceeds ofminerals taxes, and PLAN is promoting aballot initiative that would do away withthe net proceeds tax.

The Legislature passed a joint resolu-tion in this year’s session and has to passit in 2013 before it can then go on theballot in 2014.

Nevada approved an increase from 3.64percent to 5 percent net proceeds tax in1989, and that presented new revenue tothe state, but PLAN is looking at givingthe Legislature authority to level highertaxes by eliminating the net proceeds tax.

“We want the Legislature to make thedecision rather than the Constitution,”Guy Rocha, the former state archivist,said during a PLAN-sponsored forum inLas Vegas in October that was broadcaston the Internet.

Rocha also said the industry hasalready “started a propaganda campaign”against the initiative.

Michon Eben of the Reno-SparksIndian Colony said at the forum thatextractive industries aren’t paying theirfair share.

“Mining companies promise the moonbut usually deliver little more than moon-beams,” she said.

The legislative approval of changes tothe deductions for net proceeds didn’tautomatically change things. The NevadaTax Commission has to implement thechanges, and the part on sales taxes isespecially confusing, according to Crow-ley.

Streamlining permit timesgains steam in Washington



ELKO — General Moly Inc. hopes theU.S. Bureau of Land Management willrelease the draft study on the Mt. Hopemolybdenum project in Eureka County inDecember to begin another step towarddevelopment of the proposed mine.

“We anticipate publication will occurbefore year’s end,” General Moly ChiefExecutive Officer Bruce Hansen said in ateleconference.

Pat Rogers, director of environmentaland permitting for General Moly, said inNovember he believes there will be “a lotof positive comment” on the company’splan for the Mt. Hope Project when thedraft environmental impact statement isout to the public for comment.

“We’ve studied this thing for the lastfive years inside and out and up anddown,” he said. “I sure don’t expect anysubstantive technical issues.”

General Moly is planning a molybdenummine 21 miles north of the town of Eureka.Mt. Hope will have a projected mine life of

44 years and employ400 people once con-struction is completed.Hansen said in lateOctober productionshould begin in mid-to-late 2014.

Hansen said the BLM appears to bestreamlining permitting and “given theurgent need to create jobs in Nevada, he ishopeful the agency will issue a record ofdecision on Mt. Hope within six to ninemonths.

“We’re seeing shifts to weeks ratherthan months,” Rogers said.

General Moly also awaits final resolu-tion on applications for water rights to bechanged from agricultural to mining usefor the Mt. Hope Project.

The company submitted a monitoring,management and mitigation plan to StateEngineer Jason King in October as Kingordered when he approved General Moly’sapplications in mid-July. King’s ordercalled for General Moly to work withEureka County on this 3M plan.

If King approves the 3M plan and

issues the permits,they will remain ineffect while litigationmoves ahead againstthe state engineer’saction, Rogers said.

Eureka County andtwo parties of water rights holders filed anappeal in August in district court overKing’s July ruling approving the applica-tions. This was the county’s secondappeal. The first led the court to remandthe matter back to King over proceduralissues.

Eureka County Commissioner JimIthurralde told the Legislative Committeeon Public Lands during the committee’searly November meeting in Elko thecounty fully supports mining “if it is doneright,” but commissioners are worriedabout the long-term legacy of Mt. Hope.

“We feel we’re the founding fathers.This will change the whole dynamics ofthe county,” he said.

Mt. Hope will use 7,000 gallons perminute during operations, and Ithurraldesaid the county is concerned about that

amount of consumptive use.Hansen said in the earnings teleconfer-

ence that General Moly plans to continuediscussions with the county and farmersand ranchers to address issues outside ofcourt on a “rational and reasonable” basis.

The 3M plan calls for General Moly topost $1 million in financial assurances forany future mitigation of impacts fromwater usage for the Mt. Hope operations.

“We proposed the $1 million bond on avery conservative estimate of what itwould cost to mitigate impacts,” Rogerssaid.

“We will have a very robust program tomonitor for potential impacts,” Hansensaid.

Eureka County already pledged $4 mil-lion to a Diamond Valley cooperative topurchase water rights to reduce drawdownin the valley south of the town of Eureka.

Hansen said current modeling showsthe drawdown in Kobeh Valley would be 10feet in the 44 years of anticipated mine lifeat Mt. Hope, but there should be little

BLM sends draft Mt. Hope study to D.C.

See GGEENNEERRAALL MMOOLLYY,, page 42

impact to Diamond Valley and its alfalfagrowers.

The $1 million would be financial as-surances on water impact, and GeneralMoly will post a separate, much largerbond with the BLM for future reclamationat Mt. Hope.

General Moly also has been holdingtown hall meetings in Eureka and CrescentValley to keep the public up to speed on theproposed Mt. Hope Project, including ameeting and dinner in Crescent Valley inmid-November.

Meanwhile, molybdenum prices aredropping, with the price at roughly $12.65per pound in early November, the lowestthis year.

The company reported prices in thethird quarter traded in a narrow range be-tween $14.10 and $14.90 per pound, fin-ishing the quarter at $14.10 per pound.

Looking at the money side, GeneralMoly reported its cash balance at the endof the third quarter was $54 million, sim-ilar to the balance at the end of 2010.

Expenses included $2.4 million indevelopment, engineering, and equip-ment deposit costs, $2 million in general

and administrative costs and costs associ-ated with the pre-feasibility update for theLiberty Project and $500,000 in debtissuance costs related to procurement ofthe Mt. Hope Project’s bank loan.

General Moly announced a net loss forthe third quarter of $2.4 million, or 3 centsper share. The loss for the 2011 quartercompared with a loss of $6.3 million, or 9cents per share, for the 2010 quarter,according to the Lakewood, Colo.-basedcompany.

General Moly also said in its earningsannouncement that when it receives finalpermits for Mt. Hope, POS-MineralsCorp., the 20 percent owner of the Mt.Hope Project, is expected to fund its final$56 million initial contribution, plus 20percent of all costs the company has cov-ered on Mt. Hope to date.

The company estimates this combinedpayment will be roughly $100 million,after which POS-Minerals will provide 20percent of the funding for Mt. Hope.

Also, within nine months after GeneralMoly receives permits for developing Mt.Hope, Hanlong (USA) Mining InvestmentInc. is obligated to procure a drawable loanfrom a Chinese bank of not less than $665

million under an agreement with Hanlong.“The fourth quarter and 2012 will be

very exciting for General Moly,” Hansensaid. “General Moly is moving forward onall fronts, water rights, financing and pre-liminary development activities.”

General Moly also recently updatedproven and probable reserves at its LibertyProject near Tonopah, where the companyis looking at mining molybdenum andcopper. The Liberty site has been mined inthe past.

The new figures in an updated pre-fea-sibility study show an 18 percent increase

in contained molybdenum, putting provenand probable reserves at 722 millionpounds. The new study also shows a 47percent increase in copper reserves to 894million pounds, according to GeneralMoly.

Measured and indicated resources are at849.5 million pounds of molybdenum and978.8 million pounds of copper.

The update incorporated results of 33core drill holes not included in a 2008 pre-feasibility study and used a price of $12 perpound for molybdenum and $2.50 a poundfor copper.


General Moly ...CCoonnttiinnuueedd ffrroomm ppaaggee 4411

GeneralMoly’s chartshows thetimeline forexpected U.S.Bureau ofLand Man-agementapproval forthe proposedMt. Hopemolybdenummine inEurekaCounty.

General Moly


Eddie Marquez ofSmall Mine Devel-opment remotelysprays shotcretein October at Klon-dex Mines Ltd.’sFire Creek under-ground project.The shotcrete isground supportfor the declineSMD is develop-ing.



CRESCENT VALLEY — Klondex MinesLtd.’s underground Fire Creek explorationproject northwest of the town of Cres-cent Valley could be in gold ore and pro-ducing bulk samples early next year.

The company estimates the bulk sam-pling will begin in the first quarter of2012.

The Fire Creek Project has movedfairly quickly to become an undergroundoperation that can produce gold.

“I think it’s great. It’s very interestingto see a work in progress,” said DougCarter, surface superintendent withKlondex for nearly a year and a half.

Small Mine Development did the firstblast to open a portal at Fire Creek inApril.

“I was out when it was just sage-brush,” said Larry Wilson, environ-mental and permitting coordinator forKlondex, who said he started with

Klondex hopes to be bulk sampling soon

See KKLLOONNDDEEXX,, 44



See KKLLOONNDDEEXX,, page 46

Klondex ...

Ross Andreson/Mining QuarterlyBrian Engelson, assistant superintendent for Small Mine Development at Klondex Mines Ltd.’s Fire Creek underground project, drives atractor out of the mine portal.

archaeological work, planning and permitting.“We started clearing and grubbing, racing

the winter,” he said. “Then, you could see itbegin taking shape. It’s interesting to watch itbuilt.”

Klondex can extract and process up to 36,500tons of ore a year and a maximum of 120,000tons in a five-year period under current per-mitting to bring cash flow to the company thathas offices in Vancouver and Elko, while pur-suing permitting for a full-scale mine.

Underground, American Drilling is doingcore drilling with one rig, and SMD is pro-gressing with the decline, spraying shotcrete allalong the decline for ground support afterbolting wire mesh over the rock surface.

“We take ground support very seriously,”said Travis Copenhaver, safety and securitysupervisor for Klondex. “There is lots of shot-crete.”

Shotcrete is brought in by 3D out of BattleMountain.

Copenhaver also said SMD used 6-footbolting because the ground looked like itneeded longer bolts.

“There have been zero injuries,” Copenhaver

said, since the project started with sur-face work and then went underground.

SMD had completed 1,814 feet ofdrifting as of mid-October.

The underground contractor isdrifting toward the planned site of a ventraise that will provide ventilation andhave an escape hoist.

“Once we have that in place, we canstart bulk sampling,” said Jim Newton,the underground mining superintendentfor Klondex.

U.S. Mine Safety and Health Admini-stration regulations don’t allow mininguntil there is a secondary escapeway atan underground project.

The portal to the underground opera-tions is not far from a small open pit thatwas mined in the 1980s, but the portal isnot in a pit wall. Rather, SMD started theportal into a hillside after clearing thepath to it, according to Carter.

While guiding a tour underground,Brian Engelson, SMD’s assistant super-intendent for Fire Creek, pointed out the“Redford Reservoir” that holds waterpumped underground for project use.

Klondex currently has 11 employees,

including Chief Executive Officer BlaneWilson.

“Things are going well. We continueto build our Nevada staff,” said the CEO.

SMD has 20 people assigned to FireCreek, including 17 hourly workers andthree salaried employees, and they work24 hours a day seven days a week,Engelson said.

The company’s ore will be processedoff-site, and Carter said that by the timeSMD reaches the ore, Klondex will find amill to process the ore.

Klondex would like to have its ownmill, however, according to Carter. Onepossible mill is Gold Bar in EurekaCounty, which is 75 miles away.

“We’re very gold, not much silver,”Larry Wilson said.

“It’s a high-grade deposit, and thefirst bulk sampling we are going after ismore than 1 ounce per ton,” Carter said.“A good grade with a good gold pricegives you a lot of wiggle room.”

Newton said the ore will be oxide andrequire standard milling, at least forsome time to come. Later, they may berefractory ore.

“We’ve got to know what’s in the ore

and pick out the best place to process it,”Carter said.

Fire Creek is a vein system, andNewton expects drifts of probably 10 by10 feet and the use of longhole stopingwith fill to be the mining method.

“That’s the preliminary plan now,”

he said.Although the ore is in a vein system,

Newton said the longhole stoping shouldallow for minimal waste, while jacklegdrilling is “too labor intensive.”




Klondex ...

Ross Andreson/Mining QuarterlyDoug Carter, surface superintendent for Klondex Mines Ltd.’s Fire Creek Project near the town ofCrescent Valley, talks about the project during an October tour.

He has been at Klondex only a fewmonths. He said he enjoys work on asmall site.

Newton said Fire Creek will never be ahuge mine, estimating that at full-scaleit would employ roughly 150 people.

Currently, Klondex is nearing com-pletion of surface facilities, with twolined drainage ponds and a lined waste-rock dump completed and monitoringwells installed. SMD has two shopbuildings on site, as well.

Widening and improving the roadthrough BLM land to the site is the nextstep.

“We’re waiting on approval to im-prove the remaining portion of theaccess road,” Larry Wilson said.

Klondex also was awaiting approvalof a plan for additional drilling, but thecompany isn’t ready for permitting forfull-scale mining, he said.

The BLM’s Battle Mountain Districtwould decide whether to do a full envi-ronmental impact statement or envi-ronmental assessment for the project.

“You are talking about a goodly timeframe,” Larry Wilson said.

He also said the company’s statedgoal is to be a model of compliance.

Klondex reported in mid-Novemberthat the surface drilling program con-tinues to find new gold veins and toexpand the scope of the resource at FireCreek.

There were five surface drill rigsoperating in November and one dia-mond drill working underground,according to Blane Wilson.

“We just expect this resource to getbigger and bigger,” he said in Novem-ber.

Fire Creek’s current indicated goldresource is 1.65 million ounces and theinferred resource is 460,000 ounces.

The surface rigs were doing in-filldrilling of the Main, Far North and NewNorth zones, core drilling of new veinsearlier intersected with RC drilling,doing directional drilling to test possibleextensions of Main Zone at depth anddrilling 10 new targets, according toKlondex.

Five different companies were drilling— REI Drilling Inc., Boart Longyear,Envirotech Drilling LLC, O’Keefe Drill-ing and Brown Drilling.

“Rigs are in high demand,” said LarryWilson.

The 2011 surface program is estimatedto planned to include 30-35 holes andapproximately 56,000 feet of explo-ration drilling.

The company completed 16,947 feetof core and 18,040 feet of reverse circu-lation drilling by mid-November, and 20holes had been completed, with assays




Klondex ...

Ross Andreson/Mining QuarterlyTravis Copenhaver, safety and security supervisor for Klondex Mines Ltd., talks about the com-pany’s Fire Creek Project while at American Drilling’s underground core-drilling platform.



Klondex ...done for 12 of the holes.

The assays showed one hole extendedthe north Main Zone mineralization andintersected strong gold values, includinggold averaging 0.298 ounces per ton overa true width of 53.6 feet, according toKlondex.

Another hole intersected new veinsbetween the Main and Far North Zones,including true widths of 4.2 feet aver-aging 0.389 opt and 2.1 feet of 0.544 opt.A North Zone infill hole intersected twoveins of 0.3 opt, including 4.1 feet aver-aging 1.41 opt.

Although there was a short period ofopen-pit mining and several joint explo-ration ventures over the years at FireCreek, deeper drilling and expansion ofthe gold resource came later. Klondexstarted the deeper exploration programin 2004.

Klondex applied to the BLM in March2007 for designation as a small-scalefacility and received BLM approval inDecember 2009. The Nevada Division ofEnvironmental Protection issued itsapproval effective March 1 of this year.

LLEEFFTT:: Robert Tres-ner operates thecore drilling rig inOctober on theAmerican Drillingplatform at Klon-dex Mines Ltd.’sunderground FireCreek Project.

RRIIGGHHTT:: Envirotechdrillers Shaw Christ-ensen, left, of Car-lin and Raul Bara-jas of Elko work inOctober on a rignear new surfacefacilities at the FireCreek Project.



Dylan Woolf Harris/Mining QuarterlyWETLAB worker Cindy Katsma runs a water test in the Elko lab.

BByy DDYYLLAANN HHAARRRRIISSMining Quarterly

ELKO — Clients of Western Environ-mental Testing Laboratory might notknow it, but the Elko WETLAB staff isvirtually always on call.

“We continually try to meet the needsof our clients,” said Phaedra Harmening,WETLAB’s operations manager in Elko.

This includes frequently meetingclients after hours and on the weekends,Harmening explained.

WETLAB is based out of Sparks, withan Elko branch.

“We provide inorganic analysis usingmatrices,” Harmening said. Componentmatter such as water, soil, rock andsludge is tested in the office.

Mine companies are a significant por-tion of WETLAB’s clientele, but thecompany works with many other entitiesand tests the matter for specifics basedon the needs of the client.

“We aren’t limited to mining, we workwith federal agencies, municipalities,consulting and environmental firms aswell,” Harmening explained.

“Each client has different regulations

and components that need to be tested,”she said.

“We are a state certified lab, and pro-vide high quality data that is legallydefensible.”

WETLAB tests material for regulatedelements.

“Our strength is our customer ser-vice,” Harmening said.

Harmening runs the Elko office withCindy Katsma and Aimee Keys. All threewomen fulfill the roles the job requires,including preparing bottle kits, drivingthe kits to or from a client’s location andrunning the analysis in the lab.

“We are client-oriented. We curtailour daily activities to our clients,” Har-mening said.

WETLAB is also a problem solver, sheadded.

In the past, WETLAB has worked witha client to develop a new method oftesting for specifics, but because themethod is still ongoing, not much couldbe said about it at this time.

Typically, WETLAB serves its clienteleby providing kits to fill with matter and

WETLAB works with mines

See WWEETTLLAABB,, page 50

return to the lab for analysis.For example, if a municipality wants

its drinking water tested, WETLAB willsupply a bottle kit properly equipped totest the water based on the specific regu-lations that govern that municipality.

The client would, in turn, fill the bottlewith water, and a WETLAB courierwould pick it up.

The filled bottle kit would then go tothe laboratory for testing and approxi-mately 24 hours later the results would beavailable to the client, who then wouldknow if the water is safe to drink.

“If we are testing drinking water formicro-biological material it will be readyin 24 hours,” Harmening said.

WETLAB opened its Elko branch in2007. And with the commitment to cus-tomer service, the staff at WETLABexpect to remain an integral part of Elko’sbusiness community.

“We see ourselves as partners withthose we work for,” Harmening said.“The needs of our clients can change,and we provide support.”

WETLAB is at 1084 Lamoille Highway.Harmening can be reached at 340-3173or 777-9933.


WETLAB ...CCoonnttiinnuueedd ffrroomm ppaaggee 4499

From left, CindyKatsma, AimeeKeys and PhaedraHarmening, whomake up WET-LAB’s Elko staff,pose in theiroffice.

Dylan WoolfHarris/MiningQuarterly


BByy DDAANNIIEELLLLEE SSWWIITTAALLSSKKIIMining Quarterly

ELKO — The mines want to keep youthacross northeastern Nevada interested inthe industry through a program that notonly recruits a workforce, but trains it.

Twice a year, 40-plus students innortheastern Nevada interested incareers with the mining industry get theopportunity to tour either a Barrick Goldof North America mine or a mine oper-ated by Newmont Mining Corp. as part ofGreat Basin College’s “Nevada MiningRocks” tour.

The purpose for the students is toexpose them to the vast array of careersavailable through the industry. For themines, it is a way to recruit and train newtalent, as well as keep people interestedin the jobs offered by the industry, saidMelanie Lawson, Barrick’s communityrelations specialist.

“The range of trades and careers are allover the board,” said David Florence ofmaintenance, training and developmentfor Barrick.

GBC Tech Prep offers training pro-grams in relation to the mining industry.The “Nevada Mining Rocks” tour takesthose interested in careers in specificareas of mining, such as electrical orwelding, and shows those students ex-actly what those jobs entail, said TechPrep Coordinator Heather Steel.

Students from Wells, West Wendover,Carlin, Elko, Spring Creek and as far asWinnemucca participated in October in atour of Barrick’s Goldstrike Mine.

The students got a chance to tour theroaster, the maintenance shop, assay laband view a blast at the Betze Pit.

They also got to see a P&H 4100 XPCshovel in action. This particular shovel

AABBOOVVEE:: Vanessa Watson, a trainer-developer, shows gold flakes tonortheastern Nevada high schoolstudents as part of Great BasinCollege’s “Nevada Mining Rocks”tour in October at Barrick GoldCorp.’s Goldstrike Mine.

LLEEFFTT:: Summer Boston, a senior atCarlin High School, waits andwatches with other high school stu-dents from around northeasternNevada for a blast in the Betze Pit atBarrick Gold Corp.’s Goldstrike Mineduring a Great Basin College “Ne-vada Mining Rocks” tour.


Companies workwith youths tobuild workforce

See MMIINNIINNGG,, page 52


Ross Andreson/Mining QuarterlyHigh school students around northeastern Nevada get a chance to see a blast in the Betze Pit as part of Great Basin College’s“Nevada Mining Rocks” tour in October at Barrick Gold Corp.’s Goldstrike Mine north of Carlin.

Mining ...CCoonnttiinnuueedd ffrroomm ppaaggee 5511

costs $18 million and loads between 8 million and 10million tons per month, said Barrick’s Travis Munster,who discussed the pit and process area during the tour.It takes one operator and two support personnel tooperate the shovel.

“It’s the most efficient way of moving dirt,” Munstersaid.

He said one of the reasons there are electricians inthe mine’s pit area is to support the electric shovels.

Electrical careers were only one of the various careeropportunities introduced to the students throughoutthe day.

“I think most people think of the dirt and shovelsas the crux, but the opportunities in science and themedical field, even for nursing and paramedics, officepersonnel, computer programs, almost any job you’reinterested in we can do through this company,” saidWells High School adviser Dave Shellembarger, whoaccompanied his students on the tour.

He encourages his students to take the Mining Rockstour at the ages of 15 and 16 so they can begin preparingfor their future earlier than their senior year of highschool.

For Wells High School sophomore Brieanna Archu-leta the trip out to Goldstrike was an affirmation of the



Ross Andreson/Mining QuarterlyBrieanna Archuleta, left, a sophomore, and Jennifer Kelso, a senior at Wells High School, stand in front of the mills in the roaster facili-ty during Great Basin College’s “Nevada Mining Rocks” tour in October at Barrick Gold Corp.’s Goldstrike Mine north of Carlin.



vision she has for her future.Since the eighth grade when Archuleta was first

introduced to welding, she knew she wanted to workas a welder alongside her uncle at Goldstrike. Thetour reaffirmed her career path after high school.

“I just loved it today,” Archuleta said after thetour. “I already knew I wanted to work here andnow I want to so much more.”

The highlight of the tour for her was the newknowledge that welders not only fix things but helprebuild them completely, which she saw firsthandwhen the students visited the maintenance shop.

At Goldstrike, maintenance workers rebuild haultrucks. A hail truck costs $4.5 million to purchase,Florence said. He said the company can rebuild atruck for $750,000. Depending on how long arebuilt truck lasts, it can end up saving the com-pany millions of dollars.

Students can be trained locally for maintenancejobs at the mines through GBC’s Career andTechnical Education programs. These 48-weekeducation programs include diesel technology,welding technology, industrial millwright tech-nology, electrical systems technology and instru-mentation technology.


Ronnie Joe Varnell,senior assayer atBarrick Gold Corp.’sGoldstrike Mine, con-ducts a gold samplepour as high schoolstudents aroundnortheastern Nevadawatched as part ofGreat Basin College’s“Nevada MiningRocks” tour inOctober.



Ross Andreson/Mining QuarterlyAlejandra Talamantes works with ore samples in October at the laboratory at Barrick Gold Corp.’s Goldstrike Mine north of Carlin.Students on the “Nevada Mining Rocks” tour visited the lab.


“We’re looking for kids that are dedicated and hardworking. With the diesel mechanic program and elec-trical instrumentation program, it’s a lot of kids whomaybe don’t think the four-year college is for them, butthey like hands-on work,” said Lawson.

She said students who graduate from GBC can makeanywhere from $16 to $24 an hour with their first jobwith Barrick.

“This tour is to keep kids interested, and we can trainthese kids locally,” Lawson said.

Students must apply by April 1 to be accepted into the48-week Career and Technical Education programs.They start school in mid-August and graduate in June,which will enable them to begin work at the mine.

Students must submit three letters of recommenda-tion, a resume, letter of intent, take their placementtests and generally be accepted into GBC first, Steel said.

Students can also apply for an MTC scholarship of upto $5,000 that also includes a paid internship. Thisscholarship is provided by Barrick, Newmont, RAMEnterprise Inc. and Round Mountain Gold Corp.

“The goal is to see you come out with a degree,”Florence told the students after the mine tour. “A degreemight not seem to matter, but in a few years it can makea big difference in moving up.”

The application for the CTE program is available atwww.gbcnv.edu.

BByy DDAANNIIEELLLLEE SSWWIITTAALLSSKKIIMining Quarterly

ELKO — The mines keep local employ-ment agencies busy.

Staffing agencies continue to see amultitude of available jobs in the miningindustry, as well as job seekers looking tofill them.

MMaannppoowweerrThe majority of work orders that come

through Manpower’s Elko office aremining related, said Becky Tully, Elkooffice branch manager.

With 98 percent of the work ordersbeing in relation to the mining industry,she said things are as busy as ever at thestaffing agency. Manpower has been inthe Elko area since 1989.

“We just need some good, dependableemployees,” Tully said.

Most of the work orders that come

through Manpower are labor-related,however, they still receive a fair share ofskilled jobs in need of employees.

“The neat thing about going throughManpower is you have people moving tothe area and we like to target the newpeople coming into the area,” Tully said.

She said many people moving to theElko area do not have any basic miningexperience, and they receive rejection let-ters when they apply to the mines.Through the temp agency, job seekers cangarner mining experience through a tem-porary job and then reapply to the mineswith that experience on a resume orapplication.

To apply for a job through the tempagency, Manpower requires a resume.Those interested also need to fill out anapplication. Once the application is filledout, they need to go through a basic inter-view at the Manpower office.

“We are looking for dependable people

that want to work,” Tully said.She said Manpower typically fills

work orders quickly. On occasion, how-ever, the company has to search for skilledlaborers.

The types of jobs available vary, how-ever, the trend is that they are seeing anincrease in jobs. The jobs can range from


Matt Unrau/Mining QuarterlyStaffing specialists Brenda Stokes and Chris Minard review files at Manpower in Elko. Manpoweris a temporary-job agency that matches qualified employees to jobs in the mining industry.

Agencies work closely with industryStaffing the mines

See SSTTAAFFFFIINNGG,, page 57


short term — meaning one day to a fewweeks — to an indefinite time frame.

“They all vary on what that customer islooking for,” Tully said.

CCaarrlliinn TTrreenndd MMiinniinngg SSuupppplliieessaanndd SSeerrvviiccee

Mining is the busiest industry in Elkoand is also what Carlin Trend MiningSupplies and Service deals with the mostat the Elko office.

“It seems like it’s been pretty steadyand it seems like there are more jobs thanqualified applicants,” said manager SandiSullivan.

Although Carlin Trend deals with avariety of jobs, the company specializes ingeology and geotechs, of which Sullivansaid there is a shortage. Fifty percent ofthe jobs related to the mining industry aregeneralized labor and the other 50 percentare geared toward geology.

“Because of the gold price where it is,all the geologists are working, and I’mseeing fewer people to fill those posi-tions,” she said. “We have a lot moretemps than we did a year ago and it is hardto find qualified people to fill the jobs.”

Sullivan said geologist jobs can last afew months to a few years, however,project geologists prefer the short-termjobs so they can move around more.

The best way to apply for a temp jobthrough Carlin Trend is to stop in to theElko office and fill out an application.Mine Safety and Health Administrationtraining is preferred, but not required.

Carlin Trend sees available short- andlong-term labor jobs. Long term meansthree to four months.

“The labor jobs you just have to beserious and you have to be dedicated,”Sullivan said. “The mines don’t put upwith missing the bus or put up withexcuses for not coming to work andthere’s a lot of youngsters that don’tunderstand that.

“With labor jobs there are so manyopen to fill,” she said.

AAmmeerriiccaann SSttaaffffiinngg IInncc..Up to 75 percent of the business that

comes through the doors of AmericanStaffing’s Elko and Winnemucca officesis directly related to the mining industry,be it work for the mining companies ormine contractors, said American StaffingDistrict Manager Shaun Dominguez.

He said he has seen an increase in avail-able jobs in the past year that are bothentry level positions and professional

services, such as geologists.The majority of the business American

Staffing handles is temp-to-hire, whichallows the client to see if the employee is agood fit.

“After a certain amount of time theywill roll them over to their payroll” if theyare a good match for the company,Dominguez said.

He said American Staffing is flexibleand will find an employee to fit any needof an employer. The majority of jobs aretemp-to-hire, however, they will also filltemporary-only positions.

“We are so versatile and we do anyindustry, but the convenience of ourservice is to have that flexibility,” Dom-inguez said.

To apply for a position through Ameri-can Staffing, people must apply in personand go through an orientation process.Safety is a priority of the agency andapplicants have to watch a safety videoduring orientation.

The applicants are then interviewedone on one.

“We take that time to meet thatemployee and we get to see who they areand what they are looking for,” Domin-guez said.

American Staffing is constantlylooking for applicants with experience,however, Dominguez said because of the

number and variety of work orders theyreceive, he suggests anyone of any skilllevel take the time to go through orienta-tion and the screening process.

“Anyone looking for work is highlyencouraged to come down and go throughthat orientation process because that’sour business — employees,” he said. “Wecan’t succeed without employees.”

Orientation is offered at 12:45 p.m.Monday-Thursday at American Staffingin Elko.

FFeewweerr aaggeenncciieessThere are fewer employment agencies

around northeastern Nevada, accordingto the agencies still open.

In the past year, SOS Staffing, PriceMine Service, Labor Finder Intermoun-tain Inc. and Able Body Labor have closedtheir doors in the Elko area. AmericanStaffing’s Dominguez claims it is becauseAmerican Staffing has continued toexpand operations and garner moreclients.

Whatever the reason for the businessesclosures, Dominguez, as well as represen-tatives from Carlin Trend Mining Sup-plies and Service and Manpower, saidthey are working continuously to fill thesepositions with qualified employees.

Geotemps did not respond to MiningQuarterly phone calls by deadline.

Staffing ...CCoonnttiinnuueedd ffrroomm ppaaggee 5566



ELKO — Gold producers have jobs tofill, lots of jobs, but they are looking forskilled workers and professionals, whichmeans advertising, recruiting at collegesand job fairs and recruiting from com-petitors.

“We have 200 openings today,” DanaPray, recruiting manager for BarrickGold of North America, said on Nov. 1.

Those openings are in Barrick’s minesin Nevada, Hemlo in Canada, GoldenSunlight in Montana and the Salt LakeCity regional offices, but they are mainlyfor people with mining experience, cer-tified skills or college degrees.

“People come to town and think theywill just hire on here. We need certainskill sets,” Pray said. “I don’t think we’vedone a good job explaining that we’revery high tech. We don’t pan for gold.”

Pray estimated that by Dec. 31 thecompany will have filled roughly 1,600positions in 2011, including replacingworkers who leave and adding newpeople. She estimated that applicationswill again hit the 30,000 mark as theydid in 2010.

Those applications include duplica-tions, because applicants fill out one forevery job opening they might be inter-ested in taking.

Newmont Mining Corp. had received34,000 applications this year as of mid-November, said Nick Tompkins, recruit-ing manager for North American opera-tions.

“Current budgeted manpower is3,800 for 2011 in Nevada, and betweennow and 2017, we will gradually growthat to 4,300,” Tompkins said.

He said Newmont hired 110 truckdrivers from August through Octoberbecause of growth, and that hiring effortwas “very, very successful. We had over1,000 applications. It was an opportu-nity for applicants to get a foot in thedoor.”

Both Tompkins and Pray said the keyjobs are harder to fill.

“It’s a great time to be an engineer,”Tompkins said.

Pray said the need is for experienced

Engineers, geologists, skilled workersHELP WANTED

AABBOOVVEE:: Nick Tompkins, recruiting managerfor Newmont Mining Corp.’s North Americanoperations, advises applicants to put theirmining-related experience at the top of theirresumes, even if it is out of chronological orderof employment.

LLEEFFTT:: Dana Pray, recruiting manager forBarrick Gold of North America, writes on theboard in her Elko office about a job fair inTennessee. Barrick includes job fairs in itsefforts to recruit workers.

Adella Harding/Mining Quarterly

See JJOOBBSS,, page 59


underground miners, experienced mech-anics, electricians with high-voltageexperience, experienced process opera-tors, mining engineers, geologic engi-neers, mine geologists, metallurgists,safety and health professionals and mill-wrights.

“We hire a certain number of inexpe-rienced people we can train, “but we canjust bring in so many,” Pray said.

She also said experienced equipmentoperators are wanted.

If a potential employee meets Bar-rick’s needs and gets through interviewswith human resource representativesand a supervisor, and receive an offer,that person still has to go through acriminal background check, a check forsubstance abuse, a fit-for-duty phys-ical, verification of education and a ref-erence check, as well as a check of pastemployment, Pray said.

“You would be surprised at thenumber who will lie on applications. Tellthe truth,” she said.

Applications are generally filled outonline for both Barrick and Newmont.

Tompkins recommended those fillingout applications be specific about theirexperience, including details aboutequipment they have repaired, for ex-ample.

“Don’t assume everyone knows,” hesaid.

Applicants should put the work expe-rience that relates to mining at the top oftheir resumes, he also said.

Tompkins said Newmont is looking tothe future, as well as filling job slots now.

Carlin operations now employ 2,400people and “we see that growing to2,700,” he said. The Phoenix Mine nearBattle Mountain has 450 now andexpects to be at 600 by 2016, while theTwin Creeks Mine in Humboldt Countywill stay fairly steady at the current 550for the next five years, according to theforecast.

Newmont also plans to develop theLong Canyon Project in Elko Countybetween Wells and West Wendover.Tompkins said that project still has to bepermitted, so numbers aren’t certain.

Round Mountain Gold Corp. currentlyhas 850 company employees and

another 200 contractors are on site,“and we will add about 50 more com-pany positions next year mostly due toGold Hill,” General Manager RandyBurggraff said.

Round Mountain has “fairly decentsuccess” finding miners, but continuesto struggle to recruit engineers and geol-ogists, he said.

Round Mountain is operated byKinross Gold Corp., which owns 50 per-cent of the operations. Barrick GoldCorp. owns the remaining half of theoperations.

Great Basin College offers coursesgeared to the mining industry, such aselectrician, millwright and diesel mech-anics, and Barrick works with the col-lege. Pray said certification in theseskills offers students a chance at a job.

Tompkins said Newmont would like tosee the programs at GBC grow, but thereare problems because of college budgetcuts and a shortage of instructors.

He also said those courses now havestudents of all ages, where in the begin-ning mainly young people were en-rolling.

Burggraff said Round Mountain alsorelies on GBC to train workers, and themine has its own electrician apprenticeprogram.

Pray said Barrick also recruits exten-sively from six colleges that offerdegrees that fit the industry, includingthe University of Nevada, Reno, Mon-tana Tech, the South Dakota School ofMines, the Missouri University ofScience and Technology, the Universityof Utah and the University of Arizona.

Pray said a report shows there are 111mining engineers graduating in 2011, butthe demand is for 500.

Tompkins said Newmont looks at col-lege recruiting and specifically providesscholarship donations to such schools asUNR, the Colorado School of Mines, theUniversity of Arizona, Montana Techand the South Dakota School of Mines inhopes of recruiting people.

Even when jobs are filled from out ofthe area, there is the problem of housing.

“We have made around 16 trips toother areas and tried to hire people and

Jobs ...CCoonnttiinnuueedd ffrroomm ppaaggee 5588

See JJOOBBSS,, page 61

move them here. We have apartmentsand rooms at the High Desert Inn,” Praysaid.

The new Rabbit Brush Run apartmentcomplex in Elko is exclusively for Barricktoo. Pray said the first building with 12units was ready on Nov. 1, and OrmazaConstruction should have all 76 apart-ments ready by March.

“This will help, but it’s not theanswer by any means,” Pray said.

The company also has 46 temporaryapartments in Elko and will keep thosefor recruits coming from out of town,she said.

“This week, we have a team in Knox-ville, Tenn., looking at undergroundzinc miners,” Pray said on Nov. 1, addingthat trips also are planned to Kentucky,Illinois and Arizona to look for workers.

“We’re continually out doing theseevents,” she said. “We’ve done Reno andVegas and will do them again,” Praysaid.

Getting people to move from LasVegas is difficult because the potentialworkers are underwater on their homes

there, meaning they owe more than theprice they can get for their homes, shesaid.

Newmont also is visiting communi-ties where there may be potential em-ployees, including in Idaho, Missouriand Oregon.

“It’s a busy time. It’s wonderful to betalking to people outside Nevada and tobe talking about jobs and northernNevada’s lifestyle,” Tompkins said.

He said Newmont is doing a riskassessment that looks at what rentalsare available and what is needed in Elko,Carlin, Battle Mountain and Winne-mucca, as well as Wells and West Wend-over.

Newmont also is looking at wherepotential employees want to live, hesaid.

Tompkins said he is surprised moredevelopers don’t come to Elko and theother mining communities to buildmore housing.

“We’re seeing a lot of interest fromoutside the area, which causes thathousing pressure,” he said.

People coming from other places face

“sticker shock” here, however, Tomp-kins said. Housing prices, rents, gasprices and grocery prices all surprisethose coming from out-of-state, otherthan from California, he said.

Companies in several states advertisearound the West in hopes of enticingworkers to move from one mine toanother and one state to another.

“We never lose big numbers with theout-of-state ads. Typically, they are theprofessionals,” Pray said.

“It’s getting competitive, but it’s cer-tainly been friendly. I am a big believerthat fit’s going to make the difference,”Pray said, explaining that job candidatescan often tell what mine or what com-pany they will best fit, and that is whyBarrick does extensive intern programs.

Barrick sells “the whole package” ofpay, benefits, stability and opportuni-ties, she said.

“Gold can drop a long way before itaffects us, and we sell opportunity. Theopportunities are really large. We haveso many assets, and we do lots of trans-fers among the mines. Jobs are posted atthe sites,” Pray said.

Still, junior mining and explorationcompanies may have to offer “crazypay” to get experienced people becauseof the higher risks with new or smallcompanies, and their offers will eventu-ally impact the labor market, she said.

Tompkins said with the economydown, people are holding onto their jobslonger. He doesn’t anticipate a “biddingwar” over jobs.

“It’s hard to find seasoned miningengineers, metallurgists and geolo-gists,” said Cary Brunson, general man-ager of Quadra FNX’s Robinson Mine.“We have several openings on the pro-fessional side and for maintenancepeople.”

The housing shortage in Nevadamining communities is also a problemfor Robinson.

“When we try to bring people in andthey start looking, it’s discouraging,”Brunson said.

Quadra FNX is building four modularhouses in Ruth now, has 10-12 studioapartments in Ely, and plans to build adaycare center in Ely that will be free toemployees as an added incentive.


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BByy AADDEELLLLAA HHAARRDDIINNGGMining Editor

ELKO — Coeur d’Alene Mines Corp.’sRochester Mine near Lovelock is “on thecuff of a resurgence in production,” saidCoeur President and Chief ExecutiveOfficer Mitchell Krebs.

“Production begins this fourth quarterfrom the new leach pad that was con-structed this year, which adds seven moreyears of silver and gold production fromour longest running mine,” Krebs said inthe company’s third-quarter earningsreport.

Production at Rochester, the company’sonly Nevada operation, totaled 352,000ounces of silver and 1,435 ounces of gold,down from 419,000 ounces of silver and1,935 ounces of gold in the 2010 quarter.The 2011 third-quarter cost was $36.71 perounce.

Leon Hardy, senior vice president andchief operating officer, said production atRochester was from on-going residualleaching activities, while the mine focusedon completing construction of a new leachpad and placing material on the pad.

“Costs were temporarily higher duringthe quarter due to these activities, whileounces were produced solely from residualleach, resulting in the higher cost perounce,” he said.

“We have been loading the new leachpad with ore containing 4,000 ounces ofgold and 400,000 ounces of silverthrough the end of October. We will con-tinue loading that much material eachmonth, and we will expect rapid recoveryin the first 30 to 60 days of placement,which will drive higher productions in thefourth quarter,” Hardy said.

Rochester mining resumed this yearafter it ended in 2007 and productioncame from residual leaching at the minesite in Pershing County.

Hardy said there is potential for newreserves at Rochester.

“There is a significant amount of re-sources containing over 100 millionounces of silver and nearly 800,000ounces of gold, which we are aggressivelypushing to convert to resources, whileplaning for new leach pads on which toplace this material,” he said in the telecon-ference.

The Idaho-based company also re-ported companywide silver production of4.9 million ounces in the quarter, 13 per-cent higher than in the 2010 quarter, andgold production totaling 57,052 ounces, 20percent higher than last year’s quarter.

“We remain on track to produce ap-proximately 19.5 million ounces of silver atunchanged cash operating costs of $5.75per ounce and expect to achieve our finan-cial targets of $1 billion in total sales andover $500 million in operating cash flow,”Krebs said.

He said, however, that the gold produc-tion forecast is being revised to roughly220,000 ounces because of problems atthe Kensington Mine in Alaska.

Krebs said in the teleconference “Ken-sington is an underground operation withone primary way in and primary out of themine through the main portal. So we needto slow down production activities forabout six months, while we focus on com-pleting several key projects, which aredesigned to get Kensington performingconsistently and more efficiently.

“What this means in the short-term isthat Kensington’s 2011 production, will

total about 85,000 ounces of gold, andcash cost will be about $990 an ounce,” hesaid.

Companywide, Coeur reported realizednet income of $31.1 million, or 35 cents pershare, in the third quarter and adjusted netearnings of a record $93.8 million, or $1.05a share.

The net income compared with a netloss of $22.6 million, or 25 cents per share,in the 2010 quarter, while adjusted earn-ings that didn’t include accounting ad-justments compared with a loss of $4.5million, or 5 cents per share, last year.

The company stated record net sales of$343.6 million were 190 percent higherthan last year’s third quarter, and recordoperation cash flow totaled $151 million.

Coeur Rochester ready to produce “Production begins thisfourth quarter from thenew leach pad that wasconstructed this year,

which adds seven moreyears of silver and gold

production from ourlongest running mine.”— Coeur d’Alene Mines Corp.

President and CEO Mitchell Krebs


Ross Andreson/Mining QuarterlyJason Babcock, left, Salt Lake-city based operations manager for Navaho Gold, and MarkDugmore, chief executive officer of the Australian exploration company, are enthused about thecompany’s exploration work in Nevada.


ELKO — Navaho Gold’s shareholdersare mainly in Australia, but the com-pany’s exploration focus is in Nevada,where the company has a half dozenproperties.

“Not many Australians get exposureto the U.S. market. This is a uniquestory,” said Navaho Chief ExecutiveOfficer Mark Dugmore.

He said the company started outlooking for Carlin-style gold in Aus-tralia and then “decided to come toNevada and look for the real thing.We’re in the land of giants here.”

Navaho has only been listed on theAustralian Stock Exchange since April,and Dugmore said, “We’ve been quickout of the box.”

Dugmore said he was in Nevada lastyear for the Geological Society ofNevada Symposium and then beganacquiring properties that the companystarted drilling this year.

“We’re prepared to take the risk and

do the drilling,” he said. “We’re pre-pared to go deep.”

Jason Babcock, the Salt Lake City-based operations manager for Navaho,said the cost is higher to go deep butmuch of the surface has been covered inearlier drilling to the 500-foot level.

The company recently finished asecond round of drilling at StevensBasin in Eureka County southwest ofBarrick Gold Corp.’s Ruby Hill Mine,where mineralization was found in thefirst hold.

Navaho also recently finished drillingat the Rose Mine Project, southwest ofRuby Hill.

“We’re awaiting results, and we’ll seewhat is required next year to go forward.It’s still early days,” Dugmore said.

Navaho Gold has an earn-in agree-ment with Columbus Gold Corp. forStevens Basin, and an earn-in agree-ment with Renaissance Gold for theRose Mine Project.

The company also had a rig operating

Australia-based Navaho Gold explores in Nevada

See NNAAVVAAHHOO,, page 64

in mid-October at the TAZ Project nearEureka and a short distance east of theGold Bar property, Dugmore said duringa visit to Elko.

“We’re down to 2,200 feet now,” hesaid.

Navaho has an agreement withMiranda Gold for TAZ.

The company also reported on Nov. 1it started drilling at Whitehorse Flats atthe south end of Elko County offAlternate U.S. Highway 93 near theclosed Kinsley Mine. Babcock said thisis a different target and not at Kinsley.Pilot Gold is exploring at Kinsley.

Whitehorse also is a Columbus Goldproperty where Navaho has an earn-inagreement.

The hope is that this area may be partof the Long Canyon Trend, Dugmoresaid.

Navaho has a joint venture withGenesis Gold, a private company, for theCarlin East Project north-northeast ofNewmont Mining Corp.’s Leeville andTurf deposits, and another one with

Columbus Gold, called the Utah ClipperProject northwest of Barrick GoldCorp.’s Pipeline deposit.

“Two things are operationally chal-lenging: getting the right drill rigs andgetting them before winter,” Dugmoresaid.

He said in a Nov. 1 announcementthat by the end of this year the companywill have completed roughly 45 drillholes on five projects in Nevada.

Dugmore said the goal is to find golddeposits that could attract buyers, andthe company would continue on as anexploration company, rather thanattempting to be a gold producer.

He said he is confident gold priceswill remain high, giving him the confi-dence to drill deeper in hopes of findinggold.

Additionally, the company has green-fields property in Australia, said Dug-more, a geologist who worked for BHPin global base medal exploration beforeleaving 10 years ago to work mainly forjunior companies.


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BByy AANNDDRREEAA GGLLOOVVEERRMining Quarterly

ELKO — The high price of gold andnew exploration projects are contrib-uting factors keeping assay labsthroughout the Silver State busy.

“We’re just going full force,” saidVickie Friesen, manager of the AmericanAssay Laboratories branch in Elko.

The number of samples being seenhas resulted in ALS Minerals reporting arecord year, according to U.S. DirectorTom Needs. He credited the gold priceand the quality of the analysis providedby ALS Minerals with fueling the busi-ness.

The high price of gold has been driv-ing exploration across Nevada, in turnincreasing the number of samples sub-mitted to assay labs and the number of

people employed processing samples.“We have three labs in Nevada and all

three labs have undergone expansion inorder to create capacity and improve ourturnaround time,” said Needs.

The three ALS Mineral labs are inElko, Winnemucca and Reno, and to-gether employ approximately 300people throughout the state.

With a larger work force, samplesfrom ALS Minerals are available soonerthan other locations, according to thecompany. When the Elko ALS lab re-ceives samples, workers prepare themand then ship them to the Reno labora-tory for final analysis.

ALS Minerals receives approximately4,000 samples daily throughout theirNevada labs and results from the analysisare typically available in three weeks,Needs said.

Locally, there are four people workingat Elko’s American Assay lab, and Friesensaid approximately 300 samples areprocessed during an eight-hour shift.

As a prep laboratory, the Elko branch

is responsible for grinding down thesamples prior to shipping them to themain laboratory in Sparks. Friesen said


Ross Andreson/Mining QuarterlySaul Tamcho mills product in mid-November at the SGS Assay Lab in Elko.

Gold prices keepassay labs busy

See LLAABBSS,, page 66

the whole process takes between threeand five days.

“It varies upon what type of samplesthey are,” said Friesen of the processtime, “whether they’re hard-core orlarge samples or small ones, it all de-pends on how big they are.”

The SGS laboratory in Elko employseight people and prepares samples toship to larger labs in Vancouver orToronto. On average the Elko lab canprocess between 300 and 400 samplesin a day, and it takes 15 days to receiveresults from Vancouver or Toronto,Miguel Gonzalez said.

The Elko SGS lab is currently in thepeak months of operations with projectsending, according to Gonzalez. Whilethe fall is normally the busiest season forthe SGS lab, he said this fall is evenbusier than last year.

Assay labs can receive samples fromanyone, whether a large mining com-pany or an individual prospector.Neither SGS, American Assay nor ALSMinerals retain contracts with desig-nated mines.

“If companies like to send us them,we’ll process them,” said Needs.

According to Friesen, one of the largestclients American Assay Laboratories hasat the Elko location is Barrick GoldCorp., and Sparks handles a lot of sam-ples from Newmont Mining Corp.’soperations.

She said the Elko branch also handlesa lot of samples from individuals comingin with their own samples, believingthey have found gold.

The SGS lab also sees a number ofindividuals not associated with a minecoming in to have samples processed.

“We have a lot of people that just wantto check what they got in the rock,” saidGonzalez. “We’re not infatuated justwith the big ones.”

Friesen credited the high gold pricesand new exploration as helping keepElko’s economy strong, as well askeeping work steady for those employedat assay labs.

“It’s nice that we have this where therest of the U.S. is really in a financial tur-moil,” Friesen said, “but we’re doinggreat here.”


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Ross Andreson/Mining QuarterlyEnriqueta Vanuelos, left, and Genoveva Vanuelos bag samples in mid-November at SGS AssayLab in Elko.



ELKO — Construction of the pro-cessing plant and leach pad at RoundMountain Gold Corp.’s new Gold Hillsatellite mine in Nye County is underway, according to General ManagerRandy Burggraff.

“We’re still looking at pouring gold atGold Hill in the second quarter of 2012,”he said.

Installation of the liner for the leachpad was slated to begin in mid-Novem-ber, and crushed rock for the pad iscoming from the Gold Hill Pit.

“We started digging the pit to supplyrock for construction, so in a sense we’vestarted mining,” Burggraff said.

Contractors for Gold Hill are GoldCanyon, which is doing the earthwork,and Phoenix Industrial, which is buildingthe carbon-in-leach plant, he said.

Round Mountain Gold will mine, leachand process gold ore at Gold Hill, but thegold will be refined at the Round Moun-tain site, and workers will arrive at GoldHill via a new road from Round Moun-tain. Gold Hill is a roughly $50 millionproject.

Gold Hill is a new mining area aboutfive miles north of the main RoundMountain Mine, where crews are diggingthe Phase 8 expansion at the RoundMountain Pit and at the new Fairviewsatellite pit nearby. Fairview is in thestripping stage but the gold ore is nearthe surface.

Crews also are stripping the deeperPhase H, Burggraff said.

“And then we get another mine expan-sion called JK in late 2012,” he said.

WWeesstteerrnn EExxtteennssiioonnRound Mountain, which is 50 percent

owned and operation by Kinross GoldCorp. and 50 percent owned by BarrickGold Corp., also continues “heavy dutydrilling in what we now call the WesternExpansion,” Burggraff said.

The potential expansion area wascalled Deep Northwest but the name waschanged as the trending of the depositappeared to be going west. If this expan-sion gets the green light, it will still entailrelocation of facilities, including the

administration building, Burggraff said.“That’s got about a three-year study

phase, and we’ve just completed the firstyear,” he said.

Round Mountain may begin the per-mitting process for the West Expansionbefore the study phase is complete, how-ever, if it looks like there is good potentialfor the project.

“It could potentially add 10 to 15 yearsto the mine life,” Burggraff said in a tele-phone interview in November.

The mine life currently is expected togo to 2019.

Round Mountain produced 54,588ounces of gold in the third quarter for theKinross share of operations, according tothe company’s earnings report.

The 2011 production compares with48,477 ounce in the 2010 quarter, whenRound Mountain produced the gold for$625 per ounce, compared with $668 perounce in the third quarter of this year.

Kinross stated that production atRound Mountain increased over the thirdquarter of last year due to increased pro-cessing levels.

“We’re completing a very solid year,”Burggraff said. “We’re 3 percent overbudget on gold, and things have gonequite well. Of course, the Western Ex-tension has huge excitement.”

Reno-based Andre Bourget is in chargeof the Western Extension Project.

Round Mountain Gold currently has850 company employees and another200 contractors are on site, “and we willadd about 50 more company positionsnext year mostly due to Gold Hill,” Burg-graff said.

Round Mountain has “fairly decentsuccess” finding miners, but continues tostruggle to recruit engineers and geolo-gists, he said.

KKiinnrroossss eeaarrnniinnggssToronto-based Kinross reported com-

panywide adjusted net earnings rose 134percent to $273.4 million in the 2011quarter, compared with $116.8 million, or15 cents per share, in the third-quarter of2010.

Reported net earnings were down,however, at $212.6 million, or 19 cents per

Plant work underway at Gold Hill

See KKIINNRROOSSSS,, 68

share, compared with $540.9 million, or71 cents per share, in the 2010 quarterbecause of significant one-time gains inthe 2010 quarter.

Kinross Gold’s revenue rose to $1.07billion, up 45 percent over the 2010quarter as gold prices increased, with theaverage realized price at $1,646 perounce in the 2011 quarter, compared with$1,190 last year.

“Kinross recorded another strongquarter, with revenue exceeding $1 billionfor the first time, and adjusted operatingcash flow increasing by more than 82percent year-over-year to a record $422million,” said Kinross President andChief Executive Officer Tye Burt.

He also stated in the earnings an-nouncement that Kinross remains ontrack to meet its production and costgoals for the year of between 2.6 millionand 2.7 million of attributable gold equiv-alent ounces at a production cost of salesof between $565 and $610 per ounce.

Production cost of sales was up in thethird quarter to $634 per ounce, com-pared with $517 per ounce in the 2010

quarter, and Burt said this was becauseof “industry-wide cost pressures, as wellas the impact of mining lower grade por-tions of the orebody at several loca-tions.”

Total production for the quarter of647,983 ounces companywide com-pared with 575,065 ounces in the 2010quarter. Production cost of sales compa-nywide was $634 per ounce, up from$517 per ounce last year, the earningsreport showed.

The company said production fromoperations in North America remainedstrong, despite the expected reductionin grades at all three mines — RoundMountain in Nevada, Kettle River inWashington and Fort Knox in Alaska.

The Fort Knox Mine near Fairbanksproduced 76,261 ounces in the thirdquarter at a cost of $712 per ounce, com-pared with 108,680 ounces in the 2010quarter, produced at a cost of sales of$501 per ounce, according to the earn-ings report.

The Kettle River-Buckhorn opera-tions produced 41,200 ounces of gold inthe quarter, down from 46,687 in the

2010 quarter. The production cost ofsales was $463 per ounce, up from $368per ounce last year.

The Kupol Mine in Russia produced124,912 ounces, down from 159,393ounces in the 2010 quarter, and costswere up to $422 per ounce from $347 perounce last year, according to the earn-ings report.

In South America, the Paracatu Mineproduced 135,099 ounces at a cost of$670 per ounce, compared with 129,257ounces at a cost of $506 per ounce in the2010 quarter.

The Crixas Mine produced 15,551ounces at a cost of $922 per ounce, com-pared with 19,866 ounces at a cost of$483 last year.

The La Coipa Mine produced 38,539ounces at a cost of $903 per ounce, com-pared with 53,471 ounces at a cost of$729 last year, while the Maricunga Mineproduced 53,123 ounces at a cost of $515per ounce, compared with 28,844ounces at a cost of $868 in the 2010quarter.

In West Africa, the Tasiast Mine inMauritania produced 47,175 ounces at a

cost of $842 per ounce, compared with8,853 ounces at a cost of $1,176 perounce last year, according to the earn-ings report.

The Chirano Mine in Ghana produced68,372 ounces at a cost of $735 perounce, compared with 12,650 ounces ata cost of $970 per ounce last year. a 10percent interest in Chirano was 6,837ounces, which was subtracted from totalattributable production.

Kinross acquired Tasiast and Chiranoin its acquisition of Red Back last year.

Kinross also reported that projects areprogressing.

“Our drilling campaign at Tasiastcontinues both to confirm our confi-dence in the resource and indicatepotential further expansions to our pre-vious model,” Burt said. “We receivedapproval of the first-phase environ-mental impact assessment at Tasiast,and mobilization for construction isunder way.”

He also reported exploration led to thediscovery of a new mineralization areanear the surface at the La Coipa Mine inChile.


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ELKO — Midway Gold Corp. hopes to bemining gold at its Pan Project in White PineCounty in two years, creating 150 new jobsfor the Eureka and Ely communities, saidMidway Chairman and Chief ExecutiveOfficer Dan Wolfus.

Although he said the company hopes tobe hiring in two years, the U.S. Bureau ofLand Management is looking at signing arecord of decision on the project in mid-2014.

Midway filed its plan of operations onOct. 28 for the Pan Project, according toMiles Kreidler, mining engineer and mininggeologist for the BLM’s Egan Field Office atEly.

The plan calls for two large pits and twosatellites,and they will all be looked at in oneenvironmental impact statement, he said.

“We estimate June 2014 to get the ROD

signed,” Kreidler said,Midway Gold’s plans don’t stop at Pan,

however. Wolfus said that once Pan is inoperation, the company plans to seek per-mits for the company’s sister Gold RockProject that will need another 150 or soemployees who likely would live in Ely andEureka.

He said Midway has a good relationshipwith the BLM, both in Ely and in Wash-ington, and Midway’s regional office is inEly.

The Pan Project is “18 miles from Eurekaas the crow flies and 30 to 35 miles to Ely,”said R.J. Smith, vice president of ad-ministration for Midway.

“This will be about as simple an open-pitproject as can be done in Nevada,” he said,reporting the plan of operations will proposetwo open pits, a crusher system, conveyorsfrom the crusher to the leach pad and a“typical recovery plant.”

Plans call for production of roughly

75,000 to 77,000 ounces of gold a yearfrom Pan, Smith said.

Pan won’t require any dewatering andshould have minimal environmentalimpacts, and there shouldn’t be any major

sulfides at the site and no visual impacts,he said.

“It will be a smaller project that will

Midway Gold Corp.This map shows the locations of Midway Gold Corp.’s Pan and Gold Rock projects in White PineCounty.

Midway Gold Corp.making plans for Pan

See MMIIDDWWAAYY,, 71



ELKO — Nevada Copper Corp. expectsto begin sinking a shaft in early 2012 at thePumpkin Hollow Project on the outskirtsof Yerington in another step toward devel-oping a mine.

“It’s strictly a shaft sinking for explo-ration. That will start in January,” saidTimothy Dyhr, vice president of environ-mental and external relations.

The shaft sinking will be an estimated$30 million to $50 million project that willbring immediate economical benefits toYerington and Lyon County, which has a16.8 percent unemployment rate, he said.

While plans are under way for theunderground exploration, Nevada Cop-per is working on a feasibility study forthe proposed mining operation, and thetarget date for completion of the study isJan. 16, Dyhr said.

“It will present plans for integratedunderground and open pit mining and asingle mill,” he said.

Plans call for a flotation mill and ship-

ping copper concentrate.Nevada Copper earlier looked at plans

to begin underground mining and build amill on private property so productioncould begin while awaiting permitting forsurface mining that would extend ontoland managed by the U.S. Bureau of LandManagement, but has since decided onone project.

The plan changed after Yerington lookedat proposed annexation of PumpkinHollow to provide additional tax benefitsto the city, Dyhr said.

“We’re right there. We have pizzasdelivered to our site. We’re so close totown it is a viable option,” he said.

First, the company and communityofficials have to convince the Nevadacongressional delegation to approve aland deal. The BLM would sell the publicland to Yerington and the city would thenlease or sell the property to NevadaCopper. Yerington also would have landfor its own use.

The public land currently separatesNevada Copper land from city land so thedeal is necessary for annexation.

“I met with the congressional delega-tion just now,” Dyhr said in a telephoneinterview in November as he prepared tofly out of the Washington, D.C., area.“We’re pushing for quick movement onthe bill.”

Dyhr said that because of the “dire eco-nomic situation” in Lyon County, there isimpetus to move the project along.

He said Nevada Copper will finance theacquisition, but Yerington would taketitle to the land.

Yerington City Manager Dan Newellsaid the Yerington City Council and LyonCounty Commissioners have approvedresolutions supporting the propertytransfer.

Nevada Copper has been workingclosely with the city, which is anxious forthe mine development to boost the localeconomy, including agreeing earlier tomake Pumpkin Hollow a city water cus-tomer. Nevada Copper in turn did the duediligence on potential annexation.

“The city has been very helpful to us,”Dyhr said. “The critical link is annexa-tion of BLM land.”

If all goes as planned, Lyon Countygets net proceeds revenue from PumpkinHollow production and “the city gets apiece of the pie,” he said.

Annexation of the roughly 12,000acres also takes the BLM out of the equa-tion, so Nevada Copper will go to thestate and county for permits to develop amine.

“A lot of the land will be city,” Newellsaid, adding that the city is looking atcreating an industrial park, motocrosstrack, an RV park and other options forthe land.

Nevada Copper hired Timothy Drakein September to be the constructionmanager for Pumpkin Hollow, which hasmeasured and indicated resources thatinclude 6.1 billion pounds of copper, 1.6million ounces of gold and 60 millionounces of silver.

“It’s a huge resource. We haven’tfound the end of it. Drilling is still goingstrong,” Dyhr said.

The company announced in October

Nevada Copper to start sinking shaft

See PPUUMMPPKKIINN,, 71

there were three exploration rigs on site.“The mineralizing system at Pumpkin

Hollow continues to expand and producepositive step-out drill results,” GregoryFrench, vice president and senior projectmanager, said in an Oct. 19 announce-ment. “The successful expansion of min-eralization along the northeast andsouthwest edges of the North Deposit areexpected to have a positive effect onfuture open pit mine designs by con-verting waste to mineralized material.”

He said mineralization discoveredbetween the North and South deposits

also has the potential to positively affectpit designs, and the deposits “couldcombine into a single open pit if suffi-cient mineralized material continues tobe found.”

Pumpkin Hollow has been explored inthe past, and companies considereddeveloping a mine but then put the prop-erty on a back burner, but Nevada Copperhas been pushing toward turning theproperty into a producing mine.

“We are a start-up company, but in thelast year we’ve seen a real change of atti-tude. Investment companies are verybullish long-term on copper,” Dyhr said.

chug along,” Wolfus said in a telephoneinterview.

“We think it’s the perfect size for acompany our size,” Smith said.

Denver-based Midway announced inOctober that the gold resources at Pangrew 19 percent to 1.13 million ounces andmineralization remains open, with explo-ration drilling continuing.

Midway recently received BLM permit-ting for expanded exploration on the siteand is building an access road from U.S.Highway 50 to Pan under the expandedexploration permit, according to Kreidler.

Midway reported on Nov. 15 the newfeasibility study for Pan shows Pan wouldbe a robust project at gold prices of $1,200to $1,900 an ounce, and the capital costwould be $99 million.

Pan would be the first operating minefor Midway, which has been exploring inNevada for a number of years. Projects in-clude Gold Rock, Midway in Nye Countyand Spring Valley in Pershing County, aswell as the newer Burnt Canyon inPershing County.

Barrick Gold Corp. is exploring SpringValley in Pershing County under an earn-in option.

“Pan’s first, then Gold Rock and thenMidway,” Smith said.

Gold production from Pan will generatecash flow to pay for additional develop-ment and exploration work in Nevada, andWolfus said Midway wants to become anoperator.

“We’ve set ourselves up to be able to dothis ourselves. We’re an independentcompany, and we like it. Bigger is not nec-essarily better,” he said.

Wolfus said Midway started bringing in

new people in the past year and a half tohelp develop projects, including Presidentand Chief Operating Officer Ken Brunk,Richard Moritz, vice president of opera-tions, and Roger Gross, vice president ofNevada operations.

During the past year, Midway has grownfrom a five-person company to one with30 employees, according to company.

Although the current gold price is downfrom the recent high of more than $1,900an ounce, Wolfus said the price was at$1,200 an ounce when the companydecided to take Pan into production, so“$1,600 is a whoopee and $1,900 is adouble whoopee.”

He said Midway is looking at producinggold at Pan for about $470 an ounce, andwith capitalization incorporated, $700 anounce.

“There will be some ups and downs,”Wolfus said of the gold price, adding thatwith the European debt crisis and centralbanks buying gold, he believes gold will bea “very desirable commodity to own.”

At Gold Rock, the drilling is designed toverify historic gold mineralization re-ported in drill results from past operators,and the company reported in Septemberthat initial results are very positive.

A 1988 resource around the Easy Junioropen pit mine that Alta Gold operatedbetween 1989 and 1994 was reported at344,770 ounces of gold. Easy Junior is onthe Gold Rock Project site southeast ofPan.

“We believe Gold Rock could host a golddeposit that is comparable in size to ournearby Pan gold deposit, but with a poten-tially higher average grade,” Brunk said in amid-September announcement on GoldRock drilling results.


Midway ...CCoonnttiinnuueedd ffrroomm ppaaggee 6699

Pumpkin ...CCoonnttiinnuueedd ffrroomm ppaaggee 7700



ELKO — “This was yet another solidquarter of growth for the company,” RoyalGold Inc. President and Chief ExecutiveOfficer Tony Jensen said as he talked aboutthe company’s earnings.

The company also has the resources tokeep growing, and Jensen said in a tele-conference that Royal Gold continues tolook for investment in projects.

Royal Gold had a working capital sur-plus of $148.5 million at the end ofSeptember, and $155 million availableunder its revolving line of credit, he said inthe earnings teleconference on the firstquarter of the company’s fiscal year.

Royal Gold announced record netincome of $22.5 million, or 41 cents perbasic share, on record royalty revenue of$64.5 million for the quarter ending Sept.30, up 91 percent over net income for thequarter ending Sept. 30, 2010.

Net income in the 2010 quarter was$11.8 million, or 22 cents per share, on roy-alty revenue of $45.3 million.

The 42 percent increase in revenue forthe quarter was largely driven by higheraverage gold prices, along with higherprices for other metals and higher produc-tion at key royalty properties, according toDenver-based Royal Gold.

The average price of gold for the firstfiscal quarter was $1,702 per ounce, com-pared with $1,227 per ounce for the com-parable period, representing a 39 percentincrease, the company reported.

The key properties boosting productioninclude Andacollo in Chile, Voisey’s Bay inCanada and Peñasquito in Mexico, andthere was first-time revenue from Holt inCanada and Canadian Malartic.

“Our record financial results are nowreflecting the many investments we havemade over the past several years, as well asstrong metals prices,” Jensen said in theearnings announcement.

“We anticipate further productionincreases over the next few quarters fromAndacollo, Peñasquito, Holt, Las Crucesand Canadian Malartic as they all work toachieve full design capacity. And, con-struction at two key development proper-

ties, Pascua-Lama and Mt. Milligan,remains on schedule. We expect theseproperties to play a significant role indriving future growth,” he said.

According to Royal Gold, net income forthe quarter was impacted by the restruc-turing of a royalty that resulted in a chargeof $1.3 million, or 2 cents per basic share,on an after-tax basis. Excluding thischarge, net income would have been 43cents per basic share for the quarter.

Jensen said Royal Gold reduced its roy-alty on the Relief Canyon Mine in Nevadafrom 4 percent to 2 percent after FirstgoldCorp. filed for bankruptcy. SagebrushGold Ltd. now owns Relief Canyon inPershing County.

TToopp rreevveennuuee ggeenneerraattoorrssRevenue and production from the com-

pany’s top royalty properties during thequarter ending Sept. 30 included $16.84million from 13,286 ounces of gold atTeck’s Andacollo Mine in Chile, up from$8.17 million on 8,905 ounces in the 2010quarter.

Voisey’s Bay operated by Vale provided

$7.23 million in revenue on 22.7 millionpounds of nickel and 16 million pounds ofcopper, compared with $3.51 million on18.2 million pounds of nickel and 3.9 mil-lion pounds of copper last year.

Penasquito operated by Goldcorp Inc.provided $5.83 million in revenue on roy-alties tied to 48,621 ounces of gold, 3.9million ounces of silver, 29.2 millionpounds of lead and 67.4 million pounds ofzinc, compared with $3 million on 35,624ounces of gold, 3.2 million ounces of silver,21.9 million pounds of lead and 39 millionpounds of zinc in the 2010 quarter.

William Zisch, vice president of opera-tions for Royal Gold, said the company’shighest royalty providers in Nevada “allexceeded production” over the previousquarter.

Barrick Gold Corp.’s Cortez Mine inNevada provided $5.11 million on 42,855ounces of gold, compared with $2.49 mil-lion on 33,134 million ounces of gold lastyear.

Zisch said Barrick processed more

Royal Gold continues growing trend

See RROOYYAALL GGOOLLDD,, page 73

stockpiled ore from Pipeline in the latestquarter.

Royal Gold holds royalties in thePipeline area of the Cortez Mine but not inthe new Cortez Hills operations.

Quadra FNX Mining Ltd.’s RobinsonMine in Nevada gave $3.69 million in roy-alties to Royal Gold on 8,972 ounces ofgold and 27.9 million pounds of copper inthe quarter ending Sept. 30, 2011, com-pared with $3.13 million on 19,012 ouncesof gold and 28.5 million pounds of copperlast year.

Zisch said Quadra reported to RoyalGold that localized slope stability issuesimpacted calendar third-quarter outputbut production improved as miningmoved into the lower benches of theRuth Pit and higher-grade ores wereaccessed.

Robinson also completed mud removalfrom the bottom of the Ruth Pit andmoved five haul trucks from the CarlotaMine in Arizona to Robinson, whichimproved production, he said in theearnings teleconference.

Quadra reduced the 2011 calendar-

year copper guidance from between 105million to 120 million pounds to a rangebetween 95 million and 100 millionpounds, however, because of newsequencing of the mine plan and delaysin accessing the portion of the higher-grade material that was originallyexpected to be mined in the fourth cal-endar quarter.

The Holt Mine in Canada operated bySt Andrew Goldfields provided $3.59million in revenue on 9,397 ounces ofgold for the first time.

According to Royal Gold, St AndrewGoldfields reported production con-tinued to increase during the quarter anddevelopment activities at the mineimproved. Ramp advancement, footwallaccess, stope development and long-holemining in Zone 4 will be the primaryfocus for the remainder of 2011.

“Head grades increased steadily,”Zisch said.

St Andrew Goldfields expects to reachits steady state production rate of 1,000metric tons per day by the end of the firstquarter of calendar 2012.

Newmont Mining Corp.’s Leeville

Mine in Nevada provided $3.07 million inrevenue for Royal Gold on 101,240ounces of gold, compared with $2.64million on 122,834 ounces in the 2010quarter, according to the earnings report.

The Mulatos Mine in Mexico thatAlamos Gold operates gave Royal Gold$2.4 million on 29,476 ounces of gold, upfrom $1.72 million on 29,025 ounces lastyear.

The Dolores Mine in Mexico operatedby Minefinders Corp. provided $1.42million in royalty revenue on 15,945

ounces of gold and 693,531 ounces ofsilver, compared with $400,000 on8,479 ounces of gold and 160,254 ouncesof silver in the 2010 quarter.

The Las Cruces Mine in Spain operatedby Inmet Mining Corp. provided $1.31 mil-lion in royalty revenue on 23.8 millionpounds of copper,compared with $880,000on 17.5 million pounds of copper last year.

Canadian Malartic Mine operated byOsiko provided $1.31 million on 60,826ounces of gold to Royal Gold for the firsttime.


Royal Gold ...CCoonnttiinnuueedd ffrroomm ppaaggee 7722

Ross Andreson/Mining QuarterlySnow borders the Ruth Pit at Quadra FNX Mining Ltd.’s Robinson copper mine in White PineCounty, where Royal Gold holds a royalty.



ELKO — A draft environmental impactstatement on Great Basin Gold Ltd.’sHollister Project in Elko County should beout in early 2012, according to the U.S.Bureau of Land Management.

“Hollister is now the top priority for ourTuscarora Field Office, and they areworking closely with Rodeo Creek Goldand hope to have the EIS out during thefirst part of 2012,” said Lesli Ellis, publicaffairs officer for the Elko BLM District.

Rodeo Creek Gold is the subsidiary ofGreat Basin Gold operating the Hollisterunderground mine that is currently pro-ducing gold and silver under bulk sam-pling permits while awaiting BLM ap-proval to become a full-production mine.

“We are anxious to complete this sig-nificant milestone in the National Envi-ronmental Policy Act process and to moveon to the next steps, those being the finalEIS and ultimately, the record of decision,”said Teresa Conner, Great Basin Gold’sNevada environmental manager.

She said in November the companyhopes the draft EIS would be out for publiccomment by the end of this year.

The study looks at turning Hollisterinto a full-production underground mine,including construction of facilities on thesurface outside the old pit where theportal and facilities are located now.

Meanwhile, the company continuesbulk sampling and trial mining at Hol-lister.

“We continue to explore and delineatethe vein systems,” Conner said.

Ore from Hollister is processed at GreatBasin Gold’s Esmeralda mill near Haw-thorne, and she said the mill is runningwell with fine-tuning continuing. Es-meralda also is in the process of permit-ting a second tails facility through theNevada Division of Environmental Pro-tection, Conner said.

“However, construction cannot be ini-tiated until next year due to weather con-straints at the higher elevations,” she saidin November.

Currently, Great Basin Gold’s Nevadaoperations have 235 employees, Connersaid, adding that the company continuesto have problems hiring experienced,narrow vein miners.

Great Basin also recently announced Joe

Driscoll is the new vice president for thecompany’s Nevada operations.

He will be responsible for leading theteam developing the company’s Hollisteroperations in northwestern Elko Countyand the Esmeralda mill.

“We are extremely pleased to have Joejoin the company and strengthen ouroperational team in Nevada,” said GreatBasin Gold President and Chief ExecutiveOfficer Ferdi Dippenaar.

Driscoll most recently was mine man-ager for Newmont Mining Corp.’s under-ground Carlin mines and earlier was gen-eral manager of Newmont’s Leevilleunderground mine.

“We are anxious to welcome our newvice president of Nevada operations, JoeDriscoll, to the company. We are excited atthe experience and knowledge that Joewill bring to the company and our teamlooks forward to working with him toadvance all aspects of our operations inNevada,” Conner said.

Great Basin Gold reported in lateOctober that its Nevada operations pro-duced 26,045 ounces of gold from trialmining in the quarter ending Sept. 30. Thecompany reported Hollister mined 26,474metric tons of ore in the quarter and theEsmeralda plant processed 29,869 tons ofore.

The company also reported that goldand silver recoveries at the Esmeralda millremain at the targeted levels of 92 percentfor gold and 74 percent for silver.

Great Basin said in the late Octoberannouncement that the installation of anacid wash and carbon regeneration systemwas completed in early October at themill, and the company planned to pourdoré on site by the end of that October.

At Hollister, development focused onthe Blanket Zone spiral ramp, the BZAlimak raise and the 5400 BZ I-Drift inthe quarter, according to Great Basin. TheBZ Ramp had advanced 1,136 feet duringthe quarter, with 204 feet remaining tofinish the work.

“The Nevada operations continue tobuild momentum in delivering improvedquarter on quarter operational results asevident from the Q3 2011 performance,”Dippenaar said.

Great Basin Gold also operates an assaylaboratory near Lovelock after purchasing itfrom Canarc Resource Corp. for $600,000plus roughly $25,000 in expenses.

Draft environmental studyfor Hollister due out soon



ELKO — Comstock Mining Inc. hasstarted construction of a processing pondbut still needs a Nevada Division ofEnvironmental Protection air qualitypermit to begin additional work beforemining its starter pit near Virginia City.

“So earthwork is going on. We got anorder from the state so we could do thisbefore winter,” said Doug McQuide,director of marketing and public rela-tions.

Comstock hopes the first gold pour willbe in the second quarter of next year, oncemining can begin and the Merrill Croweprocess plant is expanded, he said.

“We’ve purchased or ordered everythingalready,” McQuide said in November.

Comstock recently increased goldequivalent resources at the ComstockMine Project in Storey and Lyon counties.

The measured and indicated resource isnow 1.78 million gold equivalent ounces,and the inferred resource is 990,000ounces.

Combined, the 2.77 million ounces ofresources are a 94 percent hike over thelast estimates in August 2010, accordingto the company.

“Validating 2.4 million ounces of goldand over 20 million ounces of silver is asignificant step for our team,” saidCorrado De Gasperis, chief executiveofficer of Comstock.

He said the new report represents the“most efficient drilling program in ourcompany’s history, with a discovery costof just $6 per gold-equivalent resourceounce, a truly exceptional result.”

Comstock Mining is planning a surfacemine about a mile and a half south ofVirginia City and in the vicinity of GoldHill and Silver City, according to Mc-Quide.

The surface mining will be in previ-ously mined area, expanding and goingdeeper than earlier mining. Gold Springsmined in 2005-2006, and there wasmining in the 1990s and historic miningby the Oliver Hills Mining Co., he said.

Gold Springs later changed its name toComstock and reshaped the company.

Comstock controls roughly 6,100 acresof mineral rights, including 1,000 acres ofpatented mineral rights.

The mining operation would be small,adding roughly 35 jobs, McQuide said.The company currently has 30 employeesfor the mining project so the additionalhiring will bring the number to 75-80.Comstock also has 20 employees at itsGold Hill Hotel, he said.

Plans call for producing 20,000 ouncesof gold a year initially and moving up to40,000 ounces, using heap leaching and aMerrill Crowe process plant, McQuidesaid.

The resource estimates are included ina technical report written by BehreDolbear & Co. that also recommendsComstock complete a pre-feasibilitystudy, which would allow the company tocalculate reserves.

“Behre Dolbear believes the ComstockMine Project represents a well-exploredepithermal precious metal deposit withina world-class mining district,” the newreport states.

“The density of geologic data is high,

and the reliability is excellent, especiallyin the starter mine areas,” Behre Dolbearwrote.

Opposition to the project has comefrom the community. Virginia City is atourist town highlighting historic mining.

McQuide said the company will beinvolved with the community and inrestoration of old mine properties.

The most recent drilling program,which ran from Oct. 25, 2010, throughAug. 19, 2011, focused on infill and devel-opment drilling in the Lucerne andDayton resource areas, and included 389holes, totaling 132,294 feet.

The Dayton Resource Area is south ofthe Lucerne Resource Area and includesthe historic Dayton, Alhambra, Kossuth,Cherokee and Metropolitan mines. Thehistoric Dayton Mine was the last majorunderground operation in the ComstockDistrict, before being closed by the WarAct in 1942, according to Comstock.

The company acquired these mineralproperties, including the results from 252previously drilled holes, in two separatetransactions in July.

Comstock Mining awaits air quality permit

BByy JJAARREEDD DDuuBBAACCHHMining Quarterly

ELKO — With an estimated 200,000-300,000 abandoned mines in variousdegrees of complexity and decay, theNevada Division of Minerals has a lot ofwork cut out for its staff and that of othergovernment entities.

According to an abandoned minesreport for 2010 issued in September ofthis year, 598 hazards were discoveredand ranked, which is a 35.7 percent dropfrom 2009. The report indicates 816 haz-ards were secured, and mining claimantsand private property owners secured 110hazards.

Division of Minerals staff secured 387orphan sites, which are abandoned min-ing operations on public lands where noclaimant or property owner exists,according to the report published by thedivision.

The report indicates $579,244 wasspent in 2010 for the abandoned minesprogram. U.S. Bureau of Land Manage-ment grants accounted for $75,000,mining claim fees contributed $463,236and disturbance fees accounted for$41,008.

There were no reported incidents atabandoned mine sites in 2010; however, aBattle Mountain man died in March ofthis year after falling 190 feet down an oldmine shaft in the Murphy’s MineComplex in Pershing County.

The victim was pronounced dead afterit was apparent to rescuers on the surfacethrough use of a video camera that he hadsuffered a severe head injury. The rescuewas called off when it was determinedrescuers could not safely get to him.

Since the formation of the mineralsdivision in 1987, 15,238 hazards have beenidentified and ranked, and as of 2010

11,089 have been secured. Such sites havebeen found in every county in the state.More than half of the sites have been con-sidered to be of low risk, but as much as aquarter pose moderate risk of hazard tothe public and domestic animals.

Division records indicate that outsideof people, it is not unheard of for a dog towander into a mine site and be injured orkilled.

According to the division’s report, 119bat gates also were constructed andinstalled in 2010 at hazard sites.

Abandoned mine shafts have beendetermined by biologists to be prominenthabitat sites for species of bats because of


Bulldozer operator Scott Heseltinedeftly maneuvers his dozer amongthe large rocks and steep slopes ofthe southeastern portion of ElkoCounty on Oct. 21 to close ex-tremely hazardous abandonedmines identified during a U.S.Bureau of Land Management sur-vey in June as a high priority forclosure. This particular shaft wasso big it took more than 20 pushesof dirt to fill, according to the BLM.

U.S. Bureau of Land Management

State, federal agencies secure mine hazards

See AABBAANNDDOONNEEDD,, page 78


Abandoned ...their similarity to naturally occurring caves.

Sealing up a shaft that is home to bats would impact that local population. Batsplay an important role in reducing insect populations.

Federal agencies also secure sites and keep the division informed of the work.In early November, the BLM secured 80 old mine sites near Winnemucca, and

the BLM’s Elko District closed 60.Elko district’s heavy equipment operators worked about 3,000 hours pushing

dirt and 16 district personnel from various resource programs and field officesassisted in providing safety guides to the bulldozer crew, according to Lesli Ellis,public affairs specialist for the Elko BLM District.

The Elko BLM District targeted Tuscarora, Contact and various smaller areas inthe southern part of the district for the closure work, she said.

The BLM closures were coordinated in close cooperation with Nevada Divisionof Minerals, the Nevada Department of Wildlife and the Idaho Forest Service,Ellis said.

The BLM also encourages the public to avoid abandoned mine shafts and open-ings.

Ellis stated, “Abandoned mines can contain toxic chemicals, lethal air andsteep drops. Remember to ‘Stay Out and Stay Alive.’”

She also said abandoned mine sites are archaeologically significant, and “anydebris found among them should be left as is, to preserve it for the benefit ofpresent and future generations.”

A side benefit to performing these closures, which often require the use ofheavy equipment and contracted labor, is the benefit to local communities whenworkers stay in hotels, dine in restaurants, buy supplies and shop locally,according to the BLM.


Nevada Division of MineralsThis chart shows the categories of risk in the abandoned mines located in Nevada from 1987through 2010, with a total of 11,089 secured by the end of the year.



ELKO — Revett Minerals Inc. Presi-dent and Chief Executive Officer JohnShanahan foresees “a very good year,”after record production in the thirdquarter at the Troy Mine in northwesternMontana.

“I would say the guys nailed it. Theywent beyond our targets,” he said.

The mine produced 402,700 ounces ofsilver and more than 3.28 million poundsof copper, which was a 45 percent in-crease in silver production and a 39 per-cent increase in copper production.

Shanahan said, however, that Revettended the quarter with $6 million inven-tory because of problems scheduled orecars to take the concentrate for smelting.

“We really need to work on this,” hesaid, to get the backlog on rail cars by theend of the year.

In October, he said the net cash pro-vided to the company before capitalexpenditures totaled $8.4 million in thequarter, but the amount would have been

between $10 million and $12 million if allthe copper had been shipped.

The underground mine produces thecopper and silver for milling on site,ships the concentrate by truck to Libby,Mont., and puts it on rail cars to move toa smelter in Mexico.

The mill throughput of 4,370 tons perday and silver production of 402,700ounces were the most produced in aquarter since the mine opened in late2004, according to Revett.

Cash costs also improved, with cashcosts net of a by-product basis at $4.32per ounce of silver and 69 cents perpound of copper.

Although the copper and silver priceswere down by the end of the quarter,Shanahan said $30 silver and $3 copper“are still wonderful. I am bullish oncopper and surprised it is not backtoward $4.”

He said he believes the fundamentalsfor copper remain due to worldwidedemand and “not a lot of stockpiles. I still Submitted

Revett Minerals Inc.’s underground silver and copper Troy Mine near Troy, Mont., is nestled inforest land.

Revett Minerals has record production

See RREEVVEETTTT,, page 80

think we will see copper prices of $5 and$6 in late 2012 or into 2013. I really do.”

Revett has sold 25 percent of its copperin advance at $4 a pound, Shanahan said.

“If it goes to $5, it will be good to bewrong,” he said in a telephone interview.

The copper price was in the $4 range inthe second quarter, while copper forDecember delivery was at $3.72 a pound inlate October. Silver was as high as $48 anounce in the second quarter, but the spotsilver price was at $30.45 on Sept. 30.

Meanwhile, Revett continues to addlife to Troy, a mine that was expected tohave a mine life of three and a half to fouryears in 2004.

Revett has preliminary design plansfor development of the I Bed, which ithopes to begin developing in late 2012,pending approval from state and federalagencies.

Shanahan said that because it is a newmining area, the company needs agencyapproval, “which will take a few months,”but doesn’t involve an environmentalimpact study.

“We will continue to capitalize on our

exploration and engineering efforts aswell finalize our I Bed development plansfor 2012 and detail our longer-termexploration program in and around theTroy Mine,” Shanahan said in the an-nouncement on production.

Revett is drilling both below and adja-cent to the Troy Mine and also re-assaying and relogging old core from theJF Property, as well as drilling new holeson the JF Property nearby.

Revett also is reworking the supple-mental EIS with the U.S. Forest Servicefor the Rock Creek Project that the com-pany has long been trying to permit.

The Kootenai National Forest is ex-panding the original EIS after a U.S.District Court ruling remanding thestudy back to the USFS over concernsabout threatened bull trout populationsand habitat, according to the BonnerCounty Daily Bee in Montana.

“We’re waiting for the next definitenews, a ruling from the 9th Circuit.We’re hopeful we will have something bythe end of the year. I just hope it will besooner rather than later, and I suspect itwill be positive,” Shanahan said.


Revett ...CCoonnttiinnuueedd ffrroomm ppaaggee 7799 ELKO — The Silver Institute released a

report entitled “The Silver InvestmentMarket — An Update,” which forecastsworld silver investment will reach arecord high of $10 billion in 2011.

That would be a 66 percent increaseover the $6 billion posted in 2010, ac-cording to the report.

“This update examines how silver’sprice characteristics, including its safehaven status and price volatility haveappealed to different groups of investors,and how they have reacted to price varia-tions, as well as the changing economicbackdrop,” said Washington-based SilverInstitute Executive Director Michael Di-Rienzo.

The new report by Thomson ReutersGFMS also found that the outlook forsilver prices is bullish for the rest of thisyear and into next year.

Spot silver prices started the year witha high of $30.67 per ounce and low of$26.68 per ounce, rose as high as $48.70an ounce in April, according to London fixprices on a kitco.com chart and is $33.93today on the New York Mercantile ex-change.

Silver holdings through exchangetraded funds since January 2008 havegrown by 364 million ounces to 577 mil-lion ounces as of Oct. 31, and silver coinsales is expected to break the 2010 record,according to the report.

The report states that sales of 41 mil-lion coins are forecast for the U.S. Mint’sAmerican Eagle silver bullion coin sales,eclipsing last year’s record of 34 millioncoins. The institute reported in Octoberthat sales of the coins broke the all-timerecord of 34,662,500 set in 2010, withcurrent sales exceeding 35 million in earlyOctober.

Monthly sales were averaging 3.7 mil-lion, and if the pace continues until year’send, total sales could top 44 million for2011, the institute’s new newsletterstates.

The Silver Institute said the new reporton silver investments covers several keyareas of silver investment.

“We believe this report will give silvermarket participants a fresh look intosilver’s role as an investment,” DiRienzosaid.

A copy is at www.silverinstitute.org.

Silver investment forecast


ELKO — Goldcorp Inc. reported theMarigold Mine near Valmy producedmore gold in the third quarter as the mineprocessed higher grades from the BasaltPhase 7 open pit.

The mine reached the ore after strip-ping at Phase 7.

Goldcorp’s share of gold production forthe quarter was 52 percent higher than inthe 2010 quarter at 25,600 ounces, com-pared with 16,800 ounces.

Goldcorp operates the mine and ownstwo-thirds. Barrick Gold Corp. owns theremaining one-third of the mine.

Total cash costs for the quarter atMarigold were down 4 percent to $788 perounce from $817 per ounce in the 2010quarter, according to Goldcorp.

Operating costs, however, were higherdue to longer hauls, higher fuel prices,higher labor costs and increased costs forconsumable goods, along with highertaxes and royalties due to higher produc-tion and higher gold prices.

The company also reported Marigoldreceived permitting to construct theplanned Trout Creek diversion dam toshorten haulage times and provide accessto future reserves at Marigold.

Marigold also had a successful drillingprogram that leads to the expectation thatthe Target II, Target III and Red Dotdeposits will join together, according toGoldcorp’s earnings report.

Companywide, Goldcorp reportedadjusted net earnings were up 88 percentto $459 million, or 57 cents per share, inthe third quarter.

Chuck Jeannes, Goldcorp presidentand chief executive officer, said in theearnings report the company is on track toproduce between 2.5 million and 2.55 mil-lion ounces of gold this year.

The adjusted net earnings comparedwith net earnings from continuing opera-tions totaled $336 million, however, downfrom $721 million in the 2010 quarter.

Revenues were up 48 percent to $1.3billion on gold sales of 571,500 ounces,according to the report, on Vancouver-based Goldcorp’s average realized goldprice in the third quarter of $1,719 perounce. The third-quarter 2011 realizedprice compared with $1,239 per ounce inthe 2010 quarter.

Goldcorp produced 592,100 ounces ofgold in the quarter, compared with588,600 ounces in the 2010 quarter.

Marigold in higher grades at Basalt



ELKO — Allied Nevada Gold Corp. isexpanding, seeing silver productionsurge and making plans for even moreexpansion and construction of a mill atthe Hycroft Mine in Humboldt County.

The company also is looking at movingas quickly as possible to enter the per-mitting process to create a mine at itsHasbrouck Project near Tonopah.

Silver production at Hycroft soared toa new record of 121,264 ounces in thethird quarter, compared with 75,552ounces in the 2010 quarter, according tothe earnings report.

“Silver production is far greater thanwhat we had expected. It continues totrend up to effective recovery and silvergrade, recovery certainly appears to be acouple of percentage points higher thanwe thought and silver grade is about 30percent better than the model so as itshould be,” said Scott Caldwell, presidentand chief executive officer of AlliedNevada.

“For the quarter, we sold 4.6 ounces of

silver for every ounce of gold, and I meaneven I can do that math, that’s a nicecredit to costs, 30 bucks silver, nearly $150an ounce,” he said in a teleconference.

“Again I keep telling people whatmakes this thing work, what makes itwork on a heap leach, what makes it workon a milling expansion, its silver, silver;it’s a phenomenal credit to cost now. Andonce we get the mill built, it becomes areal cash flow generator making 20 plusmillion ounces a year,” Caldwell saidabout plans for Hycroft.

Gold production at Hycroft was belowexpectations at 26,339 ounces in thequarter, however, compared with 29,563ounces of gold produced in the 2010quarter.

Adjusted cash costs of $478 per ouncefor the third quarter were down from$486 per ounce in the 2010 quarter.

Allied Nevada’s net income for thequarter was $14.7 million, or 16 cents pershare. This compares with $3.1 million,or 3 cents per share, in the same quarterlast year.

Total revenue in the quarter was $49.6million, up roughly $10.7 million from

the same quarter last year. Gold revenueswere $45.4 million, representing 26,971ounces of gold sold at a realized price of$1,684 per ounce, according to the com-pany.

The company reported gold produc-tion was down in the third quarter be-cause of delays in delivery of new equip-ment that will increase production,according to the earnings report.

The mine put the first Hitachi shovel inoperation in September, six monthsbehind schedule, and expected thesecond shovel in late November. Thedelays were cause by the tsunami that hitJapan, where the shovels are manufac-tured.

Additionally, Allied Nevada reportedan eight-week delay in the arrival ofpumping equipment needed to increasethe flow of cyanide solution to the leachpads at Hycroft, which resulted in lowerproduction out of the Merrill Croweprocess plant.

Hycroft also plans to construct agyrating crusher to boost production andcomponents are on order, according tothe earnings report.

Plans are progressing for a mill andmining expansion project at Hycroft. Thecompany received a positive feasibilitystudy during the quarter that estimatesthe project could produce 616,800ounces of gold and 25.9 million ounces ofsilver at $190 per ounce with construc-tion of a mill.

The company also announced reservesat Hycroft are now 10.2 million ounces ofgold and 388.6 million ounces of silver, or17 million ounces of gold equivalent. Theconversion of resources to reserves waspart of the mill feasibility study.

Looking at Hasbrouck, Allied Nevadasaid the company is completing a prelim-inary economic assessment for theproject and hopes to announce the studyresults and an updated mineral resourceestimate in the first quarter of 2012.

“We are going to fast-track thatproject. As soon as we can, we are goingto move right into the permitting pro-cess,” Caldwell said.

“We believe that at reasonable goldprices, and by reasonable I am saying$800 ... that it’s going to be our nextmine,” he said in the teleconference.

Allied Nevada says Hycroft has silver lining


BByy AADDEELLLLAA HHAARRDDIINNGGMining Quarter Editor

ELKO — American Vanadium Corp. ismaking plans for the a vanadium mine inEureka County, the first in Nevada.

“We’ve moved into the detail engi-neering phase and awarded ScotiaEngineering the contract for engi-neering, procurement and project man-ager,” said Michael Doyle, Reno-basedexecutive vice president of operations.

The company also has awarded Amecin Reno with the civil design work for theproject that will be done while AmericanVanadium awaits permitting.

Doyle said in mid-November the com-pany has submitted a baseline reviewwith the U.S. Bureau of Land ManageBattle Mountain District toward permit-ting the proposed operation in LittleSmoky Valley roughly 30 miles south ofEureka.

“We’re getting everything done thatcan be done. The next step is the permits,”he said.

Doyle said American Vanadium plans

presentations at the Northwest MiningAssociation convention in Sparks.

“It’s a neat project, really,” he said.Plans call for an open-pit mine and a

heap leach operation that is “one of few inthe world,” Doyle said in an earlier inter-view.

Vanadium is used to strengthen steeland also would be used for future vana-dium redox flow batteries.

The company released the technicalreport in October that shows the eco-nomic viability of the Gibellini VanadiumProject that will be on less than 650 acres.

Doyle said plans call for roughly 91workers, including contractors, workingfive days a week. The mining rate wouldbe 3.4 million tons per year. The pro-cessing would go on 24 hours seven daysa week.

The feasibility study that is included inthe compliant technical report states theGibellini Vanadium Project could pro-duce 11.4 million pounds of vanadiumpentoxide per year at an operating cost of$4.10 per pound at an average sellingprice of $10.95 per pound.

Capital costs for the project are esti-mated at $95.5 million, and the paybackon the startup costs would take justunder 2.5 years, according to the study.

There are no apparent environmentalissues, and there will be no water issues,Doyle said. Plus, it would be a smalloperation with contract mining and aprocess plant on site, making it a goodcandidate for the BLM’s accelerationefforts on permitting, he said.

The technical report states thatAmerican Vanadium’s vanadium provenand probable reserves for the Gibellinideposit total 120.5 million pounds.Measured and indicated resources total131.37 million pounds of vanadium pent-oxide.

The report also includes a first-timeinferred resource estimate for the LouieHill deposit, 41.87 million pounds.

“There is more drilling to go,” Doylesaid, estimating the Gibellini depositwould provide seven years of mining tostart, and the Louie Hill deposit wouldadd two more years. “I think we can keepthis going.”

The project is all on public land, andAtlas was the first to discover the depositin the 1950s. Others also drilled at thesite but didn’t do anything more, ac-cording to Doyle.

The late Louis Gibellini, who was wellknown in Eureka, mined for base metalson the property, he said.

The redox battery American Vanadiumhopes will be the upcoming market for itsproduct is expected to be a key to inex-pensive renewable energy, according tothe Vancouver-based company.

Doyle said large redox batteries wouldstore energy and release it onto the powergrid.

“The technology is just coming online,” he said.

The project in Eureka County wouldproduce what is called purple flake,which would go into super sacks andelectrolyte for the battery industry, Doylesaid.

Meanwhile, vanadium is used tostrengthen steel used in construction of

American Vanadium plans Nevada mine

See VVAANNAADDIIUUMM,, page 84

buildings, bridges, pipelines, ships, rail cars, airplanes and motor vehicles,which also is a growing market.

Doyle said China recently mandated that rebar be strengthened forfuture projects in that country, which will increase demand.

“That’s really driving the forecast,” he said.The feasibility study includes a forecast from Roskill Consulting Group

of London that there is a potential deficit in vanadium production comingin 2015 so prices will begin to increase in 2014.

Doyle said vanadium has a military use because it is used to strengthensteel for the defense industry.

“We’re trying to get the U.S. to list vanadium as a strategic metal,” hesaid.

Currently, roughly 95 percent of vanadium is imported mainly fromSouth Africa, China and Russia, and any produced in this country is abyproduct.

Ron MacDonald, vice Chairman of American Vanadium, recently wrotean opinion piece about vanadium and renewable energy.

He said the “U.S. government’s commitment to supporting both therenewable energy and electric vehicle industries underlines the need forthe rapid development of the automotive and mass storage batteries, andhas thrown the spotlight on domestic vanadium supplies.

“In the not-too-distant future, will America find itself exchanging anaddiction to foreign oil with an addiction to foreign batteries? Or will itcreate a successful battery market policy through its current efforts to bol-ster manufacturing while securing strategic materials? Either way, it seemscertain that playing a critical role will be a little known element: vana-dium,” he said.


Vanadium ...CCoonnttiinnuueedd ffrroomm ppaaggee 8833

ELKO — The Nevada Excellence in MineReclamation Awards for 2011 went to NewmontMining Corp. and to Baker Hughes OilfieldOperations Inc. for their accomplishments inrestoring and preserving Nevada’s environment.

“Many of the projects receiving the NevadaExcellence in Mine Reclamation Award areunique in the United States, if not the world,”said Alan Coyner, administrator of the NevadaDivision of Minerals.

According to the Nevada Division of Minerals:• Newmont was given an award in the cate-

gory of Wildlife Habitat Enhancement for thecompany’s work at the Mule Canyon Mine inLander County.

The mine is located in an area repeatedlyimpacted by wildfires in recent years and reveg-etation at Mule Canyon provides a “wildlifeoasis” in an otherwise compromised environ-ment.

• Baker Hughes was given an award in thecategory of Innovative Design and Planning forits work at the Argenta Mine in Lander County.

Poor quality water from the F-Pit at the mine

was pumped to a lined evaporation pond for dis-posal and non-acid producing waste rock wasplaced in the pit as backfill to preclude futuredevelopment of a pit lake, the Nevada Divisionof Minerals said in an announcement on theawards.

• Newmont was given an award in the cate-gory of Overall Mine Reclamation for the com-pany’s work at the closed Trinity Mine inPershing County.

All obligations have been met and all permitshave been terminated, making the mine New-mont’s first walk away closure in Nevada.

Newmont acquired Trinity in the merger withSanta Fe Pacific Gold in 1997.

The 2010 awards were presented at theNevada Mining Association convention inStateline in September.

The Nevada Excellence in Mine ReclamationAwards are an annual effort of the NevadaDivision of Minerals, Nevada Division of Envi-ronmental Protection, Nevada Department ofWildlife, the U.S. Bureau of Land Managementand the U.S. Forest Service.

Nevada mine reclamationawards go to three projects

Ross Andreson/Mining Quarterly

Core drillingAt Fire Creek

Silverio Lara knocks ore core out into a tray at American Drilling’sunderground platform at Klondex Mines Ltd.’s Fire Creek Project.

PUBLISHED BY THE ELKO DAILY FREE PRESS

QQUARTERLYUARTERLYWinter 2011-2012

mining quarterly winter 2011

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