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BUSINESSBCSATURDAY, AUGUST 22  | 2015  | BUSINESS COORDINATOR: SCOTT NEUFELD 604-605-2636 | SNEUFELD@VANCOUVERSUN.COM

JAMES KWANTESVANCOUVER SUN

It is late on a cloudy Monday afternoon and prospector Ron Netolitzky is hunched over a

fragment of drill core, 100 kilo-metres south of Dease Lake in remote northwestern B.C.

Netolitzky, magnifying glass to one eye, is looking for gold, or minerals that suggest the yellow metal is present.

He’s in familiar territory.In the late 1980s, the geologist

helped discover the high-grade Snip and Eskay Creek gold mines to the south. The finds sparked trading frenzies on the old Vancouver Stock Exchange as mining companies battled each other for a piece of the action. Legendary Vancouver financier Murray Pezim funded both deals, adding promotional fuel to the fire — and enriching shareholders.

The mines ended up producing a combined four million ounces of high-grade gold, solidifying the region’s Golden Triangle reputation.

T h e d i s c o v e r i e s m a d e Netolitzky a multimillionaire and helped secure his induction in the Canadian Mining Hall of Fame earlier this year. In a video produced for that occa-sion, he noted: “In our business, you make it taking shots.”

Now Netolitzky is back tak-ing shots as chairman of Skeena Resources, which is drilling at the Spectrum property near the B.C.-Alaska border.

It’s a tricky time to helm a high-risk junior exploration company. The only gold rush occurring these days is a stam-pede to the exits, as investors flee the sector and the gold price drifts along below $1,100 US an ounce. Even Netolitzky, who has

seen plenty of ups and downs in his decades in the business, says he has never seen anything like it.

“I can’t think of anything as bad as this cycle,” he said.

But the veteran exploration-ist is also positioning Skeena

for the uptrend he believes is inevitable.

“It’s actually the best time,” Netolitzky said of the bear mar-ket. “We’re three years away from any majors being inter-ested, but they’re watching.”

With $8.1 million in its trea-sury after a recent financing, Skeena is in a better position to weather the storm than most of its peers. Two drill rigs at Spec-trum are exploring prospective high-grade zones, and Netolitzky said the company may bring in a third rig for some deep holes. The drilling is designed to con-firm and expand a historic gold resource on the property.

“We’re dealing with Mother Nature and what’s below (the surface),” Netolitzky said. “You never know how you’re going to be treated until you drill the holes.”

MINING

Geologist Ron Netolitzky, chairman of Skeena Resources, points out prospects in the Golden Triangle of northwestern B.C. Netolitzky was key to the discoveries of the nearby Snip and Eskay Creek gold mines.

A drill crew works on Skeena Resources’ Spectrum property in northwestern B.C. The area known as the Golden Triangle has yielded several high-grade gold mines, and Skeena chairman Ron Netolitzky discovered two of them.

Prospector takes another shotIndustry hall-of-famer discovered lucrative gold mines in the 1980s

CONTINUED ON C4

Deere trims back ▶earnings outlook Deere & Co. on Friday cut its full-year outlook because it expects the weak agriculture and energy sectors to continue dragging down equipment sales. The agricultural equip-ment manufacturer has been facing a downturn in equip-ment sales as weak commodity prices hold back farmers from buying new equipment. Mean-while, a weak energy sector has been dragging down construc-tion equipment sales. Deere reduced its outlook for 2015 net income to $1.8 billion US from $1.9 billion. Deere said industry sales for agricultural equipment in the U.S. and Canada are fore-cast to be down about 25 per cent for 2015. Worldwide sales of construction and forestry equipment are forecast to be down about � ve per cent for the year.

Wal-Mart boosts ▶disaster recovery With the 10th anniversary of hurricane Katrina approaching, Wal-Mart is announcing a $25 million US, � ve-year com-mitment to support disaster recovery e� orts around the world. The corporation and its charitable foundation an-nounced the plans Friday in New Orleans. Wal-Mart says that the commitment includes an initial $500,000 in grants to non-pro� t organizations in the Gulf Coast region.

Laura’s Shoppe ▶to axe 20 stores Canadian retailer Laura’s Shoppe Inc. is planning to close 20 stores within a few weeks and seek rent reductions on 26 others as it restructures in an e� ort to ensure its survival. The stores will close by Sept. 13, says a report from the court-ap-pointed monitor KPMG. Besides the Laura, Laura Petites and Laura Plus brands, the company operates under the Melanie Lyne banner. It wasn’t immedi-ately clear which of the chain’s 162 locations are a� ected or how many of Laura’s 2,330 em-ployees will lose their jobs .

Vodka producer ▶shamed over ad In the country of vodka and Solidarity, a recent advertise-ment joining the two has provoked outrage. Polmos Bielsko-Biala, the producer of Extra Zytnia vodka, apologized this week and � red a PR � rm that used a well-known 1982 photo of a fatally injured Polish worker to advertise the alcohol on Facebook. In the black-and-white photo, four young men are carrying a � fth person who is visibly unconscious. The cap-tion suggests he is drunk with Zytnia.

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C4 BREAKING NEWS: VANCOUVERSUN.COM | SAtURdAy, AUGUSt 22, 2015|| business

Peter Koven Financial Post

Eldorado Gold Corp. confirmed it will halt all mining and devel-opment activity in northern Greece next week after the leftist government suspended its tech-nical studies.

It is a major blow to the Van-couver-based company, which has made Greece the focal point of its future growth plans. Despite its best efforts, Eldorado continues to run into significant opposition from both Athens and local protesters.

In a very pointed statement, chief executive Paul Wright said the “unfortunate outcome” is detrimental to all the company’s stakeholders, including Greek society. The company said it plans to fight the suspension in court.

“Eldorado cannot and will not continue to allocate expendi-tures to our projects in Greece while the ministry of energy is openly hostile to our activities, as evidenced by recent ministry decisions,” Wright said.

“We sincerely hope to resume our activities ... at some point

in the near future — preferably through constructive engage-ment with the ministry of energy rather than a court decision.”

The suspension, announced Thursday night, affects Eldo-rado’s Stratoni mine, as well as its Skouries and Olympias projects. Another Greek proj-ect, Perama Hill, was already on hold as the company has not received its environmental impact assessment.

Eldorado shares are down roughly 17 per cent since the Greek government suspended the technical studies on Wednes-day. This latest setback is one of many that Eldorado has faced as it tries to kickstart Greece’s min-ing sector. Since making a big bet on Greece in 2012 by buy-ing European Goldfields Ltd. for $2.5 billion, the company has faced a series of protests, some of which became violent.

A new set of problems emerged early this year when the far-left Syriza party won Greek elections. Government authorities spoke out against Eldorado within weeks of being elected, igniting concerns among investors.

Greece’s Ministry of Energy said it suspended Eldorado’s

technical studies this week because the gold miner vio-lated contract terms by doing test work in Finland instead of Greece. Wright noted that the company received numerous court decisions that confirm the legality of all of its operations in Greece.

He said the government’s deci-sion affects 5,000 direct and indirect jobs, including 2,000 of the company’s employees and contractors. Eldorado has pitched its mining projects as a way to help revive Greece’s flag-ging economy, which is suffering from high debt and years of crip-pling austerity measures.

Eldorado is taking legal action against the ministry of energy’s decision, but could not say when a court decision might be made.

The company plans to con-tinue doing environmental pro-tection work at the three Greek projects while the suspension is in effect.

But it expects to lay off most of its Greek employees for up to three months, in accordance with local labour laws. If per-mits aren’t reinstated, Eldorado said it would have no choice but to fire them.

Andrew Kaip, an analyst at BMO Capital Markets, said in a note that the suspension sets a “disturbing precedent” regard-ing the government’s ability to impede Eldorado’s operations, despite the “apparent legality” of the company’s permits.

“A significant delay or defer-ral of the projects at Skouries or Olympias may have a materially negative impact on the valuation for (Eldorado),” he said.

Eldorado Gold suspends operations in GreeceEnergy ministry ‘hostile to our activities,’ firm says

Nikolas Giakoumidis/The associaTed Press Files

Vancouver-based Eldorado Gold Corp., which is halting mining and development activity in northern Greece, above, continues to face opposition from both Athens and area protesters.

On this site visit, Mother Nature didn’t co-operate. Clouds socked in the mountain-side property (elevation 1,500 metres), preventing helicopters from landing.

Earlier in the day, a group of mining journalists, newslet-ter writers, investors as well as Netolitzky and Skeena chief executive Walter Coles Jr. had flown into the Dease Lake air-port on a chartered twin turbo-prop. Diamond mine finder Gren Thomas, a sometime Netolitzky business partner, was also a passenger.

As the plane descended, Netolitzky pulled on a jacket bearing the name of one of his other companies and joked, “We have to find more mines, Gren, I’m running out of clothes.”

Spectrum is in Tahltan terri-tory and bordered on three sides by Mount Edziza Provincial Park, part of a volcanic mountain range. The property is named for the vibrant colours that paint the slopes when the sun pokes through.

Nearby mines and advanced-stage projects illustrate the Golden Triangle’s geological promise. The remote mining district is buzzing with activity, despite the commodity down-turn that has laid waste to many Vancouver-based junior explora-tion companies.

About 40 kilometres due east of Skeena’s Spectrum property is the Red Chris copper-gold mine, the province’s newest. Opened by Imperial Metals earlier this year, Red Chris is powered by the Iskut extension of the North-west Transmission Line.

The power line, completed last year, snakes along Highway 37 and passes within 30 kilometres of Spectrum.

“ I t ’ s h u g e , ” N e t o l i t z k y responded when asked about the power line’s impact on the devel-opment of Spectrum and other projects in the area.

Further south, 65 kilometres north of Stewart, are the high-grade gold vein systems of Pre-tium’s Brucejack underground mine project. Brucejack got the environmental green light from Ottawa on July 31 and is well financed after raising $81 mil-lion earlier this year from Zijin Mining, one of China’s largest miners.

Adjacent to Brucejack is Seabridge Gold’s KSM proj-ect, a series of ore bodies that form one of the world’s largest undeveloped gold-silver-copper deposits. The cost of building a mine at the remote site, how-ever, is so large that only about a dozen companies globally are big enough to finance it.

When you’ve taken as many shots as Netolitzky, not all of them work out. One that got

away, he recalled, was Cur-raghinalt, a rich gold deposit in Northern Ireland. One of his companies had an option to acquire the property, but it was during a bear market and he couldn’t raise the money for the final payment. Curraghinalt is now being developed by another company that has a market capi-talization north of $135 million.

More recently , in 2010, Netolitzky’s Brett Resources (he was chairman) and its Ham-mond Reef gold project in north-western Ontario sold to Osisko Mining for $367 million.

S o m e t i m e s e v e n w h e n Netolitzky loses, he wins.

He was chairman of uranium explorer Boss Power in 2008 when Victoria implemented a uranium ban that sidelined the company’s Blizzard ura-nium project southeast of Kel-owna. Boss Power took the provincial government to B.C. Supreme Court and ended up with a $30-million out-of-court settlement.

A piece of that payday is even helping fund exploration at Spec-trum. Before it was folded into another of his plays, cash-rich Boss Power invested $1.5 million into Skeena’s latest financing.

Netolitzky, who graduated from the University of Calgary with a master’s degree in geol-ogy, got his start in uranium in the mid-1970s. The day after the Key Lake discovery in Sas-katchewan’s Athabasca Basin, Netolitzky headed north.

“I spent three months stak-ing in the bush in northern Sas-katchewan,” he said.

Netolitzky lives with his wife on a comfortable half-acre estate on the water north of Victoria, but he’s still most comfortable breaking open rocks on a moun-tainside or flying by helicopter to survey remote new prospects.

jkwantes@vancouversun.com twitter.com/jameskwantes

Prospector takes another shot

From PaGe c1

James kwaNTes/VaNcouVer suN

Ron Netolitzky inspects drill core from Skeena Resources’ Spectrum project in northwestern B.C.

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PUBLIC NOTICESG & Associates of Vancouver, BC

On June 24, 2015, the Chartered Professional AccountantsAct of British Columbia came into effect, amalgamating theInstitute of Chartered Accountants of British Columbia, theCertified General Accountants Association of British Columbia,and the Certified Management Accountants Society of BritishColumbia, to establish the Chartered Professional Accountants ofBritish Columbia as the unified professional regulatory body forprofessional accountants in British Columbia.

It has recently come to the attention of the Chartered ProfessionalAccountants of British Columbia that SG & Associates ofVancouver, BC issued a review engagement report in late2014, signed “SG & Associates Chartered Accountants”. At therelevant time, SG & Associates did not hold a practice licensefrom the Institute of Chartered Accountants of British Columbia,and therefore was not entitled to use the designation “CharteredAccountants” or the initials “CA” signifying that designation.

SG & Associates is not currently registered as a firm under theChartered Professional Accountants Act, and therefore is notentitled to use:1. the designation “Chartered Professional Accountant” or theinitials “CPA” signifying that designation, or

2. any “legacy designation”, including the designation“Chartered Accountant” or the initials “CA” signifying thatdesignation.

Vermeer has been on the search for the “Ultimate HorizontalDirectional Drilling Crew” and has selectedUlmer Contracting (www.ulmercontracting.com), as one of eight finalists in North America!The crew finalists will be selected by public online voting and willadvance to compete in an ultimate HDD skills competition Sept 29 –Oct 1, 2015 at the International Construction and Utility EquipmentExposition (ICUEE) in Louisville, Kentucky. There, the finalists willput their drilling skills to the test to prove why they should be namedas the “Ultimate Crew.”We encourage everyone to support the only Canadian and BritishColumbian drilling team by voting for Ulmer Contracting.Help send them to Louisville this fall.To vote please go to www.navigatornation.com and click on“Ultimate Crew”. You can vote for Ulmer Contracting once per dayuntil August 31, 2015.

Congratulations to Ulmer Contractingfrom the Vermeer BC team!

Vermeer BC is part of a family of companies owned by Wesgroup Equipment and WesgroupProperties, a major Vancouver based real estate company. Wesgroup Properties has been an integralpart of the building of BC and its economy for the past 50 years. www.wesgroupequipment.com.

Vermeer BC congratulates Ulmer Contractingas the Canadian Ultimate Drilling Crew Finalist

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