Sunday 21st October 2018

Resource Clips

October, 2011

Prosperity For Whom?

October 31st, 2011

Taseko’s BC Mine Hangs in the Balance

By Greg Klein

Read part 2 of the Taseko New Prosperity Mine Story

Read part 3 of the Taseko New Prosperity Mine Story

“The message is simple,” the Vancouver Sun quoted Grand Chief Edward John of B.C.’s First Nations Summit last August. “If you’re going to develop a mine or oil and gas, you need to ensure First Nations people are involved.”

That’s been the guiding principle of resource development in British Columbia for several years now. But a proposal by Taseko Mines Ltd TSX:TKO shows how the extraordinary rights—and additional potential rights—of a few thousand aboriginals might block a project that could provide jobs for themselves and many thousands of others.

Taseko's BC Mine Hangs in the Balance

Taseko’s gold-copper mine proposed for south-central BC is back before the Canadian Environmental Assessment Authority. On October 19, BC aboriginal leaders held an Ottawa press conference calling on the federal government to reject the New Prosperity project without even studying it. One year earlier, native concerns prompted the feds to reject Taseko’s earlier Prosperity proposal. Now the CEAA has until November 7 to decide whether to accept the company’s revised plan as is, allowing the proposal to move further into the permitting stage for construction, or spend up to 12 months on another study. Taseko has spent over $110 million on the project, which first entered the environmental review process in 1993.

A November 2010 CEAA study killed the previous proposal. The report’s conclusions expressed relatively little concern about the environmental impact but had surprisingly much to say about aboriginal rights, potential rights and spirituality. The three-person CEAA panel’s mandate did not include making recommendations, but its report nevertheless persuaded Canada’s Minister of the Environment, then Jim Prentice, to reject the proposal.

Now Taseko is back with a $300-million alteration, bringing the adjusted cost to $1.1 billion. The extra expense is the cost of preserving Fish Lake, a 118-hectare body of water that was originally considered for a tailings dump. That was a primary focus of CEAA concern. Rising metal prices, Taseko says, now make it possible to relocate the tailings two kilometres away, saving the lake and, the company hopes, the mine.

New Prosperity would be one of Canada’s largest gold-copper mines, an open-pit project with a measured and indicated resource estimated at 5.3 billion pounds copper and 13.3 million ounces gold, including proven and probable reserves of 2.4 billion pounds copper and 7.7 million ounces gold. Its 2007 feasibility study projects a 20-year mine life producing an annual average 300,000 ounces gold and 130 million pounds copper for the first five years.

Its economic impact would be massive, according to a Taseko-commissioned report by the Centre for Spatial Economics—71,000 direct and indirect jobs, $4.3 billion in federal taxes, $5.52 billion in provincial taxes, an $11-billion increase in Real GDP and a 5,400-person increase in BC’s population.

To emphasize the industry’s importance overall, on October 25 the Mining Association of BC released a report commissioned from PricewaterhouseCoopers. It says the mining sector spent $5.2 billion in BC last year for a total output of $8.9 billion, attributing for each dollar spent $1.73 in direct, indirect and induced total impact. Taxes paid by this sector in 2010 were $449.2 million at the federal level, $414.8 million provincial and $74.6 million municipal, with an additional $364 million in royalties and land taxes. The industry provided 45,703 jobs direct, indirect and induced. The report also notes that BC has “the world’s largest concentration of exploration firms and mining professionals.”

For all that, BC ranks surprisingly low as a mining-friendly location. The Fraser Institute’s 2010-2011 survey rates the province 36th out of 79 jurisdictions internationally. That’s a slight improvement over 2009-2010, but the score still lags behind the three previous annual studies.

“We’ve studied British Columbia since the 1990s, and things have improved a lot,” says Fraser Institute spokesperson Jean-Francois Minardi. “But the mining community believes there are still problems. There seems to be a lack of trust in the government. The main reason is the uncertainty, the sudden policy changes, especially with recent decisions concerning uranium, the Prosperity mine and Flathead.”

In February 2010, after years of protests from environmentalists in Canada and the US, the BC government banned mining in the Flathead Valley in the province’s southeastern corner. About 10% of the region had already been staked. One of the companies effectively expropriated was Max Resource TSX:MXR, which had spent $750,000 on its Crowsnest gold project. “The reason to kick them out was arbitrary,” Minardi says. As a result the industry now fears “the possibility that official land use plans will be overturned without due consultation.”

In March 2009, the BC government banned uranium and thorium exploration “even though Canada is the world’s largest exporter of uranium and has the most stringent regulations and safeguards,” Minardi says. “Metals and minerals do not occur in isolation,” he adds, “so a ban on uranium could affect other types of mining, like rare earths.”

There seems to be a lack of trust in the government. The main reason is the uncertainty, the sudden policy changes, especially with recent decisions concerning uranium, the Prosperity mine and Flathead —Jean-Francois Minardi

Once again, on October 21, the uranium ban hit the fan. The Vancouver Sun reported that Boss Power Corp TSXV:BPU received a $30-million out-of-court settlement, considerably more than its estimated sunk costs of $4 million to $5 million. Court documents show the BC government admitted that its deputy minister of mines ordered his chief inspector to ignore the company’s application for an exploration permit, an order that contradicted advice from the attorney-general’s department. The ban on uranium mining came three days later.

A week after reporting the Boss payout, the province’s media learned that BC Hydro, the Crown electrical utility, has an undisclosed $2.2 billion in deferred debt, an amount expected to hit $5 billion by 2017. Richard Stout, spokesperson for the Association of Major Power Customers of BC, said the problem exacerbates concerns about future rate increases that could hinder large-scale industrial development.

The Prosperity project, Minardi says, creates further uncertainty. The proposal passed the BC environmental assessment only to be rejected at the federal level, largely because it would destroy the 118-hectare Fish Lake. The region’s aboriginal groups had turned down a revenue-sharing plan (see below). “The lack of aboriginal treaties is a big problem with [its concomitant] lack of clarity.” Minardi declares. He doesn’t, however, see any solution.

Mining Association President/CEO Karina Briño says BC’s mining outlook has improved during the last year, emphasizing that the province’s revenue-sharing program for aboriginals is “a policy that’s making a difference.” She adds, however, that miners would like “one environmental assessment process that meets the requirements of both federal and provincial levels of government.”

She emphasizes, “We need more clarity in the scope of the assessment and the requirements expected of proponents.”

The provincial government extended the revenue-sharing policy from forestry to mining in August 2010, with two agreements that will transfer nearly one-third of the provincial mineral tax royalty from two mines to local aboriginals.

One of the deals concerns Thompson Creek Metals’ TSX:TCM Mount Milligan Copper-Gold Mine. The McLeod Lake Indian Band will get $35 million to $40 million over the mine’s 15-year life. The band’s population is currently estimated at 491.

Provincial revenue from New Gold’s Inc TSX:NGD New Afton Copper-Gold Mine will bring the Tk’emlups and Skeetchestn Indian Bands, currently estimated to have a combined population of about 1,500 people, about $30 million over 12 years.

As the deal was announced, Black Press quoted Tk’emlups Chief Shane Gottfriedson as saying his band expected more money to come. “While this agreement is specifically for the mine tax for the New Afton mine located on our territory, we look forward to a more comprehensive agreement on all revenues generated by such projects.”

But the Tsilhqot’in National Government, representing five bands totalling about 3,100 people, steadfastly spurns any such benefits from the New Prosperity proposal. They won’t even talk to Taseko. And so the $1.1-billion proposal remains at an impasse.

Read part 2 of the Taseko New Prosperity Mine Story

Read part 3 of the Taseko New Prosperity Mine Story

Batero reports Colombia Gold Assays including 0.54 g/t over 400m

October 31st, 2011

Resource Clips - essential news on junior gold mining and junior silver miningBatero Gold Corp TSXV:BAT announced assay results from its Batero-Quinchia project in Risaralda Department, Colombia. Highlights include

0.54 g/t gold over 400 metres (including 0.8 g/t over 152 metres)
0.61 g/t over 182 metres (including 0.71 g/t over 137 metres)
0.75 g/t over 352.1 metres (including 1.01 g/t over 212 metres)

President/CEO Brandon Rook commented, “We are pleased with the continued successful results from the drilling at La Cumbre porphyry, including drill hole LC023 which has returned to date at the project the longest mineralized intercept grading greater than 1 g/t gold. This was near surface and continues to contribute to the growth of the surface footprint of elevated gold and copper grade at the project. Also, the result from LC023 has both extended the eastern boundary of the porphyry and has also enhanced the overall grade of the porphyry in this sector while remaining open at depth.”

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Batero Gold Corp

by Ted Niles

Riverstone reports Burkina Faso Gold Assays up to 1.34 g/t over 26m

October 31st, 2011

Resource Clips - essential news on junior gold mining and junior silver miningRiverstone Resources Inc TSXV:RVS announced results from the Kao zone of its Karma gold deposit in Burkina Faso, West Africa. Assays include

1.34 g/t gold over 26 metres
1.11 g/t over 28 metres
1.7 g/t over 8 metres
1.29 g/t over 10 metres
2.18 g/t over 8 metres
1.51 g/t over 8 metres

CEO M.D. McInnis remarked, “These results continue to be very encouraging and exciting to the overall project. Kao is a shallow-dipping zone and we are confirming and extending the presence of good grade gold mineralization along strike and down dip from the existing known resource. We expect that a substantial increase in the potential open-pittable resource can be achieved by drilling that is planned to increase the overall resource.”

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Dwayne L Melrose

or Raju Wani
Investor Relations

by Ted Niles

Heatherdale, Niblack report Alaska Assays of 302 g/t Silver, 13.57 g/t Gold over 8.2m

October 31st, 2011

Resource Clips - essential news on junior gold mining and junior silver miningHeatherdale Resources Ltd TSXV:HTR in joint venture with Niblack Mineral Development Inc TSXV:NIB announced assays from the Niblack VMS project in southeast Alaska. Results include

13.57 g/t gold, 302 g/t silver, 4.66% copper and 15.26% zinc over 8.2 metres
5.54 g/t gold, 126 g/t silver, 2.54% copper and 10.96% zinc over 13.6 metres
5.68 g/t gold, 141 g/t silver, 4.6% copper and 10% zinc over 10.9 metres

Heatherdale has a 60% interest in the Niblack project—which will increase to 100% after its friendly takeover of Niblack is completed—and is the project operator. Heatherdale President and CEO Pat Smith stated, “The 10 delineation holes drilled from underground in the Lookout Zone have reaffirmed the robustness of the mineralization at Niblack. Drill core collected from this program will also be utilized to advance our understanding of the project metallurgy, and support engineering studies toward completion of a prefeasibility study. The additional data and information received from these drill holes will be incorporated into a new resource estimate that will be completed shortly. I am extremely pleased with the results of the 10 exploration holes – three of which were drilled from underground and seven from surface. These holes are confirming the excellent potential of the stratigraphy that hosts mineralization at Niblack, and have validated the application of the new geological interpretation.”

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Read More about Heatherdale Resources

Heatherdale Resources Ltd
Investor Services

or Niblack Mineral Development Inc
Brian Budd
Director of Corporate Development

by Ted Niles

New Pacific reports Yukon Assays of 322.26 g/t Silver, 8.43 g/t Gold over 9.7m

October 31st, 2011

Resource Clips - essential news on junior gold mining and junior silver miningNew Pacific Metals Corp TSXV:NUX announced drill results from the Skukum Creek deposit and Raca prospect of its Tagish Lake gold project in Yukon. Highlights include

6.52 g/t gold and 321.81 g/t silver over 8.2 metres
(including 16.63 g/t gold and 853.33 g/t silver over 2.6 metres)
8.43 g/t gold and 322.26 g/t silver over 9.7 metres
(including 11.34 g/t gold and 434.15 g/t silver over 6.3 metres)
7.08 g/t gold and 143.95 g/t silver over 20.2 metres
(including 12.94 g/t gold and 225.32 g/t silver over 6.8 metres)

The Mt. Skukum gold mine, located at Tagish Lake, operated from 1986 to 1988, with total gold production of 77,790 ounces.

View Company Profile

Jason Nickel
VP Engineering

by Ted Niles

Pelangio reports Ghana Gold Assays as high as 1 g/t over 60m

October 31st, 2011

Resource Clips - essential news on junior gold mining and junior silver miningPelangio Exploration Inc TSXV:PX announced assays from the Pokukrom East and Nfante East zones of its Manfo property in Ghana. Results include

1.06 g/t gold over 22 metres
1 g/t over 60 metres
2.48 g/t over 9 metres
2.47 g/t over 9 metres
2.24 g/t over 19 metres
1.03 g/t over 23 metres
1.07 g/t over 19 metres

Senior VP Exploration Warren Bates commented, “Infill drilling at Pokukrom East continues to confirm a consistent bulk tonnage gold zone from section to section and down-dip extension beyond 250-metres depth. We continue to encounter higher grades (2+ g/t) along the footwall of the mineralization, as seen in SPDD-166, and excellent potential for the zone to continue to depth beyond the northern end of the defined geochemical anomaly. We are now well on our way to drilling out Pokukrom East on 50-metre centres as we move towards an initial resource by mid next year.”

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Read More about Pelangio Exploration

Ingrid Hibbard

or Warren Bates
Senior VP Exploration

by Ted Niles

Lake Shore reports Ontario Gold Assays including 1.31 g/t over 414m

October 31st, 2011

Resource Clips - essential news on junior gold mining and junior silver miningLake Shore Gold Corp TSX:LSG announced results from its Fenn-Gib project in Ontario. Assays include

1.31 g/t gold over 414 metres (including 1.54 g/t over 264 metres)
3.29 g/t over 29.3 metres
1.19 g/t over 265 metres
1.43 g/t over 166 metres

President/CEO Tony Makuch said, “We are very encouraged by the results being announced today as part of our confirmation and infill/expansion drill program at Fenn-Gib. The twin holes drilled and check sampling work completed clearly show that past results are holding up very well, with there being some upside potential. The results from Hole FG-11-04, drilled into an untested gap, were also very significant. This hole provided strong confirmation of the geologic model, demonstrated that mineralization extends from the syenite into the mafic volcanics and continues to depth uncovering a 200-metre expansion of shallow mineralization to the north of previous drill holes. Today’s results very much support our view that Fenn-Gib has the potential to host significant open-pit and underground resources and we are very much looking forward to announcing our initial resource for the project before the end of 2011.”

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Tony Makuch

or Mark Utting
VP Investor Relations

by Ted Niles

Trevali reports NB Assays as high as 1.1 g/t Gold, 104.57 g/t Silver over 18.5m

October 28th, 2011

Resource Clips - essential news on junior gold mining and junior silver miningTrevali Mining Corporation TSX:TV announced assay results from its Stratmat deposit in New Brunswick. Highlights include

0.75 g/t gold and 36.34 g/t silver over 25.1 metres
1.1 g/t gold and 104.57 g/t silver over 18.5 metres
1.17 g/t gold and 62.95 g/t silver over 17.9 metres
65.52 g/t silver over 16.3 metres
56.54 g/t silver over 13.7 metres
99.57 g/t silver over 10.7 metres
1.03 g/t gold and 78.34 g/t silver over 18.1 metres
1.13 g/t gold and 121.68 g/t silver over 13.5 metres
90.04 g/t silver over 14.5 metres
1.65 g/t gold and 87.81 g/t silver over 13.1 metres
34.35 g/t silver over 38.1 metres

The Stratmat deposit is located roughly 20 kilometres east of Trevali’s Halfmile Mine project where production is anticipated to begin in late 2011.

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Steve Stakiw
Manager, Corporate Communications

by Ted Niles

Marathon, Mountain Lake reports Nfld Gold Assays up to 5.99 g/t over 12m

October 28th, 2011

Resource Clips - essential news on junior gold mining and junior silver miningMarathon Gold Corporation TSX:MOZ in joint venture with Mountain Lake Resources Inc TSXV:MOA announced assays from the Leprechaun deposit of the Valentine Lake project in Newfoundland. Results include

3.69 g/t gold over 13 metres (including 39.8 g/t over 1 metre)
3.34 g/t over 10 metres (including 9.52 g/t over 3 metres)
6.61 g/t over 3 metres
1.23 g/t over 7 metres
5.99 g/t over 12 metres (including 28.88 g/t over 2 metres)
6.96 g/t over 3 metres
4.41 g/t over 3 metres
5.41 g/t over 5 metres (including 26.04 g/t over 1 metre)
5.73 g/t over 3 metres (including 17.09 g/t over 1 metre)
1.61 g/t over 13 metres (including 12.76 g/t over 1 metre)
5.94 g/t over 3 metres

The property is a 50/50 joint venture with Marathon acting as project operator. Marathon President/CEO Phillip Walford commented, “Our exploration initiatives have proven advantageous for Marathon. As we approach the end of our 2011 drill program, we continue to discover wide intervals of high-grade mineralization as well as significant hanging-wall and foot-wall mineralization. These new high-grade gold intercepts will have a positive impact on the new Leprechaun Gold Deposit resource which is on track for release in the fourth quarter of 2011.”

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Read More about Marathon Resources

Marathon Gold Corporation
Jennie Guay
Investor Relations Manager

by Ted Niles

Luna President John Blake on Brazil gold assays of 2.57 g/t over 53m

October 28th, 2011

Resource Clips - essential news on junior gold mining and junior silver miningLuna Gold Corp TSXV:LGC announced results from its Piaba gold deposit in northeast Brazil. Assays include

1.54 g/t gold over 36 metres
1.64 g/t over 31 metres
1.24 g/t over 24 metres
2.57 g/t over 53 metres
2.61 g/t over 14 metres
4.32 g/t over 31 metres
2.22 g/t over 54 metres
2.03 g/t over 35 metres
2.49 g/t over 55 metres
3.64 g/t over 22 metres
1.11 g/t over 25 metres
2.6 g/t over 41 metres
2.01 g/t over 52 metres
1.21 g/t over 38 metres
1.51 g/t over 65 metres

President/CEO John Blake tells, “We’re a producing gold mine. We hit our feasibility study production levels in August this year, and we’re producing at the rate of 60,000 ounces per year—we’ve been steady on that for the last three months. We’re working along the Piaba pit, which is a three-kilometre strike length of greenstone orogenic structure.

“We’re coming to the end of our drill program. The company embarked on a 40,000-metre drill program last August. We’ll cut off the drilling at the end of this month, and we’ll be doing our resource upgrade. We’re targeting the first week in December to make the upgrade public. The resource-definition program has been drilling along strike and at depth to improve our inferred resources to measured and indicated and also to add more ounces. The 1.3-million-ounce resource we have at Aurizona at the moment was based on 30,000 metres of drilling. We’re doing 40,000 now, so you can see what we’re trying to target in terms of an additional upgrade.

There are some very good high-grade intersections, but what it really demonstrates is that we’ve got really good continuity around about the 1.36 g/t range—John Blake

“What these results show is continuity along strike and at depth,” Blake continues. “We’re getting very good and consistent values, and I’d say that the upgraded resource is going to show that continuity both along strike and at depth. We’re very encouraged that we can get a sizeable increase in our resource, and these drill results just show that level of consistency. There are some very good high-grade intersections, but what it really demonstrates is that we’ve got really good continuity around about the 1.36 g/t range, which is our current resource head grade.

“We are in process with our scoping study at the moment which will be completed in 2Q 2012. Our market guidance for 2012 is for 60,000 ounces of gold production, and our scoping study will give us a path to produce 100,000 ounces in 2013.

“We’re an emerging producer at the moment, and we’re undervalued. If you look at our history, we’ve raised our capital through private placements. Last month, we raised $42 million with National Bank Financial as our lead. That’s the first time we’ve used banks. Up until now we’ve had no coverage, so we would be one of the only gold producers on the TSX without market analyst coverage. So we are not a well known story for the institutions. We haven’t actively marketed ourselves until recently because we weren’t producing, but now we’ve got a good story to tell.

“We went through a phase where we had mechanical issues in the construction phase that have been repaired and are operating,” Blake adds. “But now we’re delivering our feasibility-study production. We’ve revamped our management team, and we’ve got a really strong operational team now to add to the strong team we already had in finance and exploration. Also, we’ve recently recapitalized the company with WestLB in terms of new project debt financing, and we’ve raised equity in the market.

He concludes, “We’ve now got very solid capital structure to move the company forward. The next step is to increase our resource in December so we’ve got a solid platform for growth.”

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Investor Relations

by Ted Niles