Sunday 11th December 2016

Resource Clips


Posts tagged ‘alaska’

University of British Columbia research associate Murray Allan discusses the Yukon-Alaska Metallogeny project

September 23rd, 2016

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The northern enigma

September 2nd, 2016

UBC researchers help explorers better understand Yukon and Alaskan geology

by Greg Klein

They’re not necessarily the mob you’d find whooping it up in the Malamute Saloon. But the spell of the Yukon and neighbouring Alaska has attracted a unique collaboration of industry and academia with a mission—to unravel some of the geology that remains mysterious after more than a century of scrutiny. Demonstrated dramatically by Goldcorp’s (TSX:G) $520-million takeout of Kaminak Gold, the land of Robert Service, Jack London and countless TV reality shows still has considerable mineral wealth to be found.

UBC researchers help explorers better understand Yukon and Alaskan geology

Murray Allan (left), students Kathryn Grodzicki and Stephen Bartlett
take a break while mapping in Yukon’s Dawson Range.
(Photo: Murray Allan)

Joining the search are students and faculty from the University of British Columbia’s Mineral Deposit Research Unit. Catalysed by the discovery of the territory’s White Gold district, the group conducted its Yukon Gold Project from 2010 to 2012. They returned in 2014 with the current Yukon-Alaska Metallogeny project, partly inspired by the Kaminak discovery.

“We’re basically looking at everything from the Yukon-B.C. border all the way up to the Fairbanks area,” MDRU research associate Murray Allan tells ResourceClips.com. “It’s an enormous package of ground.”

The region includes Kaminak’s Coffee, Western Copper and Gold’s (TSX:WRN) Casino and Copper North Mining’s (TSXV:COL) Carmacks deposits, among other resources in the Dawson Range Mineral Belt.

Much of the work involves “digesting public information, assimilating already-existing data into coherent data sets that can be of value to companies when they’re deciding where to target,” Allan explains. “In parallel to that we’re doing our own field work, looking at areas that are poorly understood, sampling rocks, understanding the age and the controls on mineralization so companies can make much better technical exploration decisions.”

It’s “a huge, collaborative effort,” he emphasizes. “What we do relies 100% on the participation of industry sponsors and the exploration industry as a whole. Just as important is the relationship we have with the various government surveys.”

Last month the group collected a $557,670 grant from the Natural Sciences and Engineering Research Council of Canada. The project also gets $700,000 in direct and in-kind contributions from Kaminak, Sumac Mines and Copper North. The MDRU works closely with the Yukon Geological Survey and also with the national surveys of Canada and the U.S.

Kaminak president Eira Thomas credited the group with bringing “a high level of scientific rigour … to our geological understanding of the Coffee gold resource. This knowledge ultimately contributes to improved exploration and development planning.”

The region’s lack of glaciation presents challenges as well as benefits, Allan points out. There’s little rock at surface, so trenching plays a bigger role in early-stage work. On the other hand, soils have largely stayed put for an awfully long time. “For example, if a program identifies a gold anomaly in soils, almost certainly they’re very close to a bedrock source of mineralization.” That helps explain legendary prospector Shawn Ryan’s success in sparking the Yukon’s most recent gold rush.

Speaking of legendary, the Klondike gold fields sit within the project area. There, the lack of glaciation “led to very deep weathering of mineralized rock, which ultimately led to the efficient accumulation of placer gold deposits,” Allan points out. Probably 20 million ounces or more have been pulled out of Klondike creeks. Yet a bedrock source of gold that’s economic by current mining standards remains elusive.

UBC researchers help explorers better understand Yukon and Alaskan geology

Some of the Yukon-Alaska Metallogeny team
on a site visit to Kaminak’s Coffee project.
(Photo: Murray Allan)

“Up until now, despite lots of effort, there’s been no notable discoveries of gold in the ground. Either it’s a problem with the exploration methods or our understanding of what controls gold in the Klondike, or perhaps there’s a good geological reason why there might not be huge quantities of gold in economic concentrations in the ground,” he says.

“Our role is to understand what controls mineralization of any age and any style. That plays into the structural controls, whether faults of a particular orientation might be important, or whether a certain igneous rock of a particular age might play a role. We have examples of both. We’ve identified a large number of systems related to Late Cretaceous intrusions, for example, which we know are very fertile for copper and gold mineralization. But the White Gold district that kicked off in 2009, for example, has no intrusions to our knowledge that control mineralization there. The gold seems to be purely associated with faults.”

Having wrapped up 2016 field work last month, the group’s back at UBC, busy processing samples and compiling data. Their findings, often in the form of maps and data sets, go first to industry sponsors. That gives the companies a short-term advantage during a period of confidentiality. Then the info goes public, in a thesis or academic publication.

But even back in Vancouver, the spell of the Yukon remains.

“It’s an interesting role for us to play, doing modern, cutting-edge science in an area that has that industrial heritage,” Allan says. “I don’t think anyone working in that area would deny that’s part of the appeal. But the fact remains that there’s a lot of gold we know about, for example in placer creeks, but not much knowledge about the source of that gold. So there remains a huge amount of potential for hard rock explorers in that part of the world. There’s a very legitimate economic reason for investment and exploration in that part of the Yukon and Alaska.”

The MDRU returns to the field next June.

Program could cut Group Ten Metals’ Ontario exploration costs by 33%

July 12th, 2016

by Greg Klein | July 12, 2016

A rebate could save Group Ten Metals TSXV:PGE up to a third of its exploration spending on the Drayton-Black Lake gold project in northwestern Ontario. On July 12 the company announced the Junior Exploration Assistance Program approved a maximum $100,000 rebate. The provincial government’s Northern Ontario Heritage Fund and the Ontario Prospectors Association sponsor the program.

Program could cut Group Ten Metals’ Ontario exploration costs by 33%

The company proposed a 20-hole, 2,000-metre drill campaign for the project’s Moretti area where historic, non-43-101 results averaged 18.65 grams per tonne gold in a 4,087-kilogram bulk sample and 14.1 g/t for an 8,069-kilo sample.

The property, partly staked and partly under option, sits 10 kilometres south of the town of Sioux Lookout in the vicinity of First Mining Finance’s (TSXV:FF) Goldlund project and Treasury Metals’ (TSX:TML) Goliath project.

The Northern Ontario Heritage Fund is a provincial Crown corporation that invests in regional businesses. The Ontario Prospectors Association approves JEAP funding following a review of expenses submitted after early exploration work has been completed.

In the Yukon, Group Ten has Phase II exploration planned for its Catalyst PGM-nickel-copper project adjacent to Wellgreen Platinum TSX:WG. Group Ten holds three Yukon projects with the dominant land position in the Kluane Ultramafic Belt. The company’s portfolio also includes the Duke Island copper-nickel-PGE project on the Alaska Panhandle.

Criminal consequences

April 8th, 2016

As Blankenship plans an appeal, other miners in the U.S. and Canada fare worse

by Greg Klein

One year in prison and another on supervised release—six days apart from each other two American courts handed two former mining executives identical jail time. One ex-boss was implicated in polluting a river, the other in 29 mining deaths.

The latter, former Massey Energy CEO Don Blankenship, also got a $250,000 fine. The sentence came almost exactly six years after the underground explosion at West Virginia’s Upper Big Branch coal mine operated by a Massey subsidiary.

As Blankenship plans an appeal, other miners in the U.S. and Canada fare worse

Widespread outrage greeted the sentence but the judge—a coal miner’s daughter—gave Blankenship the maximum penalty allowed for a misdemeanor of conspiring to violate safety regulations. In December a jury acquitted him of felony charges of securities fraud, lying to the U.S. Securities and Exchange Commission, and conspiring to impede mine safety officials. Convictions could have brought him 31 years in prison.

In the past Blankenship reportedly donated millions to friendly politicians and judges including, Bloomberg reports, $3 million to support a West Virginia Supreme Court of Appeals judge “who helped overturn a $50-million jury award against some of Massey’s units.”

John Grisham cited Blankenship as the novelist’s inspiration for The Appeal, depicting a ruthless Wall Street billionaire and his bought-and-paid-for Supreme Court judge. Grisham later wrote Gray Mountain, a fictional indictment of the Appalachian coal industry.

Alpha Natural Resources took out Massey in 2011 for $7.1 billion. Alpha eventually paid about $209 million for fines, restitution and mine safety improvements. The company also settled a securities class action suit for $265 million, as well as settling undisclosed amounts with 29 families.

Other former Upper Big Branch staff convicted after the disaster include superintendent Gary May, who got 21 months in prison, security chief Hughie Elbert Stover, who got three years, and Massey executive David Hughart, who got 42 months.

According to the United Mine Workers of America, 52 people died on Massey property under Blankenship’s reign. Still maintaining his innocence on the misdemeanor, Blankenship intends to appeal.

The week before his sentence, a federal judge in Alaska gave Canadian James Slade one year in prison and another on supervised release for criminal violations of the U.S. Clean Water Act, the Alaska Dispatch News reported.

Prosecutors described Slade as the senior on-site executive of XS Platinum during the 2010 and 2011 mining seasons when salmon-spawning streams “turned muddy brown with waste water,” according to an earlier ADN story.

The company was extracting platinum from tailings on a former mine site near the Bering Sea coast of southwestern Alaska. Slade argued that his Australian supervisors refused his request to provide equipment that would have stopped the discharge.

But the ADN quoted the judge saying Slade “really had a choice, and when it became clear the two Australians were adamant about making as much money as they could and to heck with any pollution control equipment, he could have walked away from this job.”

Two Americans face sentencing after pleading guilty to related charges. Prosecutors declined to extradite the Australians, Bruce Butcher and Mark Balfour.

The British Columbia legislature has amendments pending that could impose $1 million in fines and three years in prison for Mining Act violations. Triggered by the 2014 Mount Polley tailings dam collapse, the new regs strengthen penalties currently capped at $100,000 and one year. But following a 2015 Vancouver Sun investigation, the paper reported that “no fines had been levied in the courts under the Mines Act since 1989.”

Notwithstanding the lack of Bre-X convictions, Canada might do more to deter fraud than other mining-related offences. In 2013 the Ontario Securities Commission slapped geologist Bernard Boily with a $750,000 fine and $50,000 costs for fraudulent assays that brought a class action suit against his employer. The previous year geologist John Gregory Paterson got six years for a nearly four-year-long assay-faking scam.

From carbon tax to blood tax

March 23rd, 2016

Canada should reject American hypocrisy and Saudi blood oil, says Stewart Muir

by Stewart Muir, posted with permission of Resource Works

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Don’t miss a new PBS exposé out March 29 featuring human rights abuses in Saudi Arabia, which sold $100 billion worth of crude oil to Canada between 2012 and 2015. Those who have seen the documentary say the footage is shocking to behold.

It’s a mystery why Canada is content to import billions in blood oil from Saudi Arabia while at the same time pursuing policies at home aimed at eliminating Canadian oil from the market.

Canada should reject American hypocrisy and Saudi blood oil, says Stewart Muir

Which world leaders would be happy to
see Canada stop producing its own energy?
(U.S. White House photo by Pete Souza)

Just before Christmas, the Saudis beheaded Filipino Joselito Lidasan Zapanta because he could not pay a ridiculous $1-million fine.

Policies aimed at curtailing western Canadian energy development will only make us more dependent on bloodthirsty Saudi oil, while eliminating tens of thousands of our best-paying jobs.

If we are content to let eastern Canada source its oil from a country that executes citizens who question the government, and at the same time sell armaments to Saudi Arabia, what does that say about our own democratic system?

Yet if Ottawa has any particular concern over the soaring suicide rate among Canadian oilpatch workers, that would be news to me.

For those who don’t believe you have to give up the economy to save the environment, the resulting question is simple: What is the way to stand up for Canadian families and stop rewarding Saudi princes for their despicable practices?

One practical step we can take today is simply to ensure that every Canadian policy on fossil fuels applies equally to all of our energy imports.

Until 100% of our imported products are in compliance, no Canadian products should face domestic prejudice.

I understand we need international trade, but Ottawa’s eagerness to source oil from a savage regime while taking measures to curb the oilsands remains a sore point with me.

One possibility is imposing a blood tax, much like a carbon tax, that rewards social responsibility. Our Charter of Rights and Freedoms, our parliament and our courts provide a yardstick that we could use to measure others against.

Obama’s Arctic vision and what we could learn

On a similar topic, last week saw a major existing supplier of Canadian oil take strides to massively increase its own oil production. I’m talking about the United States and its decision to pursue a long-term exploration plan for the high Arctic.

Come again? Isn’t U.S. President Barack Obama a climate crusader working hard to end the burning of hydrocarbons and stop Canada from building pipelines?

No, actually, he’s not. In case you thought moral suasion from Canada on addressing climate change was having any effect whatsoever on the U.S., think again. The fact is, the U.S. is obsessed with its own energy security and there is no way it will jeopardize a long-term supply of the fossil fuels that provide about 80% of its needs.

Canada should reject American hypocrisy and Saudi blood oil, says Stewart Muir

(Image: Resource Works)

Last week’s news from the U.S. Bureau of Ocean Energy Management will result in new oil and gas leases off the coast of Alaska. The map of the area that could be opened to drilling includes offshore territory Canada claims as its own.

Why is the U.S. doing this now? Simple: because Americans have a long-term plan for energy.

“If development starts now, the long lead times necessary to bring on new crude oil production from Alaska would coincide with a long-term expected decline of U.S. Lower 48 production,” reported the National Energy Council, which advises the U.S. government. “Alaskan opportunities can play an important role in extending U.S. energy security in the decades of the 2030s and 2040s.” (See page 13 of the report.)

So while the U.S. is taking pragmatic steps for long-term viability as an energy-intense nation state, in Canada we seem to be at risk of basing energy planning on “100% carbon-free” slogans that appeal strongly to some voters. The March 22 federal budget was heavy on climate and clean-energy promises that require (and deserve) focus. Yet as the budget also recognizes, our national future depends on the ability to evolve and improve the solutions we already have in place.

A National Energy Council for Canada

Much work is now required for Canada to figure out what it means to look for new ways to “expand and green” the economy and create opportunities for citizens. For now, the lack of a coherent Canadian energy strategy also means, as CBC pointed out last week, that questions are being raised as to whether U.S. energy development in the north threatens our very sovereignty.

Americans are no fools. They know that the longer time frame required for arctic projects is the result of remoteness, long supply chains, short exploration seasons due to ice, regulatory complexity and potential for litigation. The Americans know that it can take more than 30 years to line up all the necessary success conditions and that’s why they are getting cracking now.

In Canada, we also have the potential to ensure that beneficial energy sources, ones that will be subject to unwavering environmental controls, are developed.

What we totally lack is a coherent national political vision—one that acknowledges the need to green our energy supply and lower our impact on the planet, one that also recognizes the economic realities of the present day.

An attempt at a national energy strategy, developed by the premiers at the Council of the Federation, represents a weak vision compared to the clear path that American energy planners are following. Placing national sovereignty far down the list of priorities is not a mistake that other countries are making today. Also unlike most countries, Canada occupies an enormously privileged position when it comes to the natural assets it possesses.

Last week, the National Energy Board reported that a heretofore wallflower of Canadian natural gas plays, the Liard Basin, is suddenly the belle of the ball. This source of gas (the cleanest fossil fuel) now turns out to be one of the biggest in the world. It straddles the Yukon, B.C. and the NWT. The upgraded estimates say the Liard has enough natural gas to meet Canada’s needs at 2014 levels of consumption for nearly 70 years. Meantime, the NWT is sitting on 200 billion barrels of oil identified in two NWT shale formations alone.

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Group Ten Metals completes Yukon field program, expands PGM-nickel-copper turf

March 1st, 2016

by Greg Klein | March 1, 2016

Still growing its northern presence, Group Ten Metals TSXV:PGE has staked additional ground for the Spy project in southwestern Yukon. That increases the platinum group metals-nickel-copper property by 1,250 hectares to total 3,135 hectares, the company announced February 29.

Group Ten Metals completes Yukon field program, expands PGM-nickel-copper turf

Assays are pending from a sampling program
on Group Ten Metals’ expanded Spy property.

Group Ten optioned 100% of the first claim block in September for 1.05 million shares over three years and a 3% NSR. With funding assistance from the Yukon government, the company then conducted silt and rock sampling, prospecting, mapping and reinterpretation of previous geophysics. Once assays arrive, they’ll be integrated with the geophysical reinterpretation to define targets for trenching and possibly drilling.

Historic, non-43-101 grab samples returned grades as high as 75.8 grams per tonne platinum, 7.9 g/t palladium, 7 g/t gold, 2.6% nickel and 10.45% copper, Group Ten reported.

Spy comprises one of three road-accessible Group Ten projects in the 600-kilometre-long Kluane Ultramafic Belt, stretching from northern British Columbia through the Yukon into southern Alaska. Roughly 40 kilometres north of Spy sits Group Ten’s flagship Catalyst project, which borders on three sides the Wellgreen PGM-nickel project, where Wellgreen Platinum TSX:WG completed a preliminary economic assessment last year. Group Ten’s Ultra project sits south of Spy.

In September the company also picked up the Duke Island copper-nickel-PGE project on the Alaska Panhandle for two million shares and a 1% NSR. In western Ontario Group Ten holds the Black Lake/Drayton gold project.

MOU offers Americans scrutiny over B.C. mining projects

November 25th, 2015

by Greg Klein | November 25, 2015

British Columbians and Alaskans will seek involvement in each other’s mining proposals following a memorandum of understanding signed November 25. The MOU calls for governments and natives to take part in environmental assessment and permitting processes in their neighbour’s jurisdiction. But with an emphasis on trans-boundary waters, which mostly would consist of rivers and streams originating in B.C., Canadian projects might get more scrutiny than those next door.

B.C.-Alaska MOU pledges cross-border co-operation on mining and environment

The memo follows visits by B.C. mines minister Bill Bennett and Alaska lieutenant-governor Byron Mallott to each other’s turf. Bennett’s trips, following the tailings dam collapse at Imperial Metals’ (TSX:III) Mount Polley mine, tried to reassure Alaskans about B.C. environmental practices.

In August 2014, just weeks after the disaster, Alaska’s Department of Natural Resources asked Canada’s Environmental Assessment Agency for participation in the approval process for Seabridge Gold’s (TSX:SEA) KSM gold-copper project near the state border. Provincial approval had already been granted the previous month. The federal permit came through last December.

Other prominent projects in B.C.’s northwestern corner include:

  • Galore Creek, a NovaGold Resources TSX:NG/Teck Resources TSX:TCK.A and TCK.B copper-gold-silver project that reached pre-feasibility in 2011

  • Schaft Creek, a Copper Fox Metals TSXV:CUU/Teck copper-gold-molybdenum-silver project that achieved feasibility in 2013

  • Chieftain Metals’ (TSXV:CFB) Tulsequah Chief zinc-copper-gold project, now permitted for construction

  • Pretium Resources’ (TSX:PVG) Brucejack gold-silver project, slated for 2017 commercial production

  • Imperial’s Red Chris copper mine, which achieved commercial production in July

The MOU sets no timeframe for achieving its goals. Money for the cross-border initiative would come from existing government budgets, with the possibility of additional “alternate public or private sector funding.”

How fares Canada in the Fraser Institute’s global mining survey?

February 25th, 2015

by Greg Klein | February 25, 2015

Saskatchewan’s number two worldwide, Quebec’s back in the top 10 and Manitoba climbed 17 notches. But Alberta, Ontario and British Columbia took a beating in the latest Fraser Institute survey of mining jurisdictions. Released February 24, the study rates 122 jurisdictions (including provinces and states in Canada, the United States, Australia and Argentina) based on 485 returned questionnaires. Drawing on their 2014 experience, mining and exploration companies provided numerical ratings for a number of factors, which the institute tracked on separate indexes.

Most important is the Investment Attractiveness Index, which combines two other indexes—Best Practices Mineral Potential (geology) and Policy Perception (government attitudes). The institute weighs the IAI 60% for geology and 40% for public policy, roughly the same consideration companies reported for their investment decisions.

Here’s the top 10 IAI globally, with 2013 rankings in brackets:

1 Finland (4)
2 Saskatchewan (7)
3 Nevada (2)
4 Manitoba (13)
5 Western Australia (1)
6 Quebec (18)
7 Wyoming (11)
8 Newfoundland and Labrador (3)
9 Yukon (8)
10 Alaska (5)

Here are the Canadian runner-ups:

15 Northwest Territories (25)
21 New Brunswick (23)
22 Alberta (10)
23 Ontario (14)
28 British Columbia (16)
29 Nunavut (27)
42 Nova Scotia (47)

Prince Edward Island wasn’t included.

As for the bottom 10:

113 Sudan
114 Nigeria
115 Bulgaria
116 Guatemala
117 Egypt
118 Solomon Islands
119 Honduras
120 Kenya
121 Hungary
122 Malaysia

The 122 jurisdictions totalled 10 more than in 2013. For inclusion, the institute requires a minimum of 10 responses per jurisdiction.

The anonymous replies also included comments which, for Canadian provinces and territories, note serious but unsurprising concerns.

But for some people, the rankings rankled. B.C.’s 10th-place finish out of 12 Canadian jurisdictions doesn’t jibe with the province’s second-place status for mining investment, according to the Association for Mineral Exploration British Columbia. Citing data from Natural Resources Canada, AME BC credited Ontario as Canada’s favourite for attracting investment. Fraser Institute respondents stuck that province with ninth place in Canada.

“Furthermore, one of the best indicators of success in exploration is seeing discoveries move through to mine development,” said AME BC president/CEO Gavin Dirom. “In recent years, we have seen a number of new major metal mines constructed in our province, including Copper Mountain in 2011, New Afton in 2012 and Mount Milligan in 2013. Also, Red Chris is being readied for commercial operations, and the KSM and Kitsault mine development projects have received environmental assessment certificates.”

The NWT and Nunavut Chamber of Mines noted the Northwest Territories’ considerable improvement and its breakaway territory’s slight slump. The organization vowed to continue working with federal and territorial governments “to improve the investment climate for exploration and mining in the two territories.”

Download the Fraser Institute Survey of Mining Companies 2014.

Intelligent exploration

January 23rd, 2015

AME BC’s Roundup 2015 encourages both technical excellence and community engagement

by Greg Klein

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If nothing else, the occasional downturn offers an opportunity to pause and reflect. That explains the theme of this year’s Roundup, Intelligent Exploration. Presented by the Association for Mineral Exploration British Columbia in Vancouver from January 26 to 29—and preceded by three days of related events—the world’s premier conference of its kind now marks its 32nd year. And despite the industry slowdown, Roundup has expanded some of its features as it settles into new and bigger surroundings at the Vancouver Convention Centre East.

AME BC’s Roundup 2015 encourages both technical excellence and community engagement

An expanded Roundup takes advantage of a larger
location at the Vancouver Convention Centre East,
under the sails of Canada Place.

Roundup’s purpose, explains conference chairperson Kendra Johnston, “is primarily to bring the exploration community together to share information about what all parties have been doing and the progress they’ve made on all fronts of exploration, from the actual geological/technical work to the peripheral things like land use and community engagement, to move exploration into the following year.”

As for Intelligent Exploration, this year’s theme came about because “it’s been a difficult year so we thought it was a good opportunity to take a step back and reflect. We’re looking at the technical aspects of projects, what we can do to advance a project, what we can glean from other projects in the area and from majors that have put a mine in place.”

But Roundup acknowledges more to exploration than the technical challenges. The conference also examines “how we can work with communities, what kind of environmental work we can do to move a project forward. We have to make sure we’re doing everything to the best of our abilities, whether it’s technical or peripheral to the geological aspects of a project.”

AME BC’s Roundup 2015 encourages both technical excellence and community engagement

Kendra Johnston: “It’s been a difficult year for companies but we’ve had some great sponsors return and some
new sponsors come forward as well.”

The technical stuff actually kicks off on January 23, when the short courses begin, and continues throughout Roundup as professionals share their expertise. Showcase sessions tackle other issues, such as industry policy, aboriginal engagement, social responsibility and health and safety. Breakfast and lunch keynote speeches offer the insights of industry bigwigs. Speakers from B.C., the Yukon, Northwest Territories and Alaska will sing the geological and jurisdictional praises of their home turf.

Of course social events will proliferate. Among them are the Old Timers’ Lunch, curling, hockey, lots of networking and, just maybe, some drinking too.

The January 27 Awards Celebration of Excellence Gala fetes several individuals and organizations for exemplary service to exploration and development.

But Roundup reaches beyond the industry to engage the wider community. One example is Gathering Place, which brings together explorers and natives in four days of events. “It’s a great program, people really enjoy it,” says Johnston. “At some point in its growth, an exploration project involves everybody in the community, so this has been an important part of the conference for about four years now.”

Other programs focus on students, from elementary though high school and into university. “If you look at the demographics of this industry, there’s an entire age range that’s missing because of the last downturn in the late ’90s and early 2000s,” Johnston points out. “That’s created a bit of a hole as we have a generation of people reaching retirement. So we really need a new influx of people.”

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Year in review

December 23rd, 2014

A mining and exploration retrospect for 2014

by Greg Klein

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Another difficult year notwithstanding, the resource sector failed to meet its apocalyptic doom. With a mixed bag of good, bad and quirky news, ResourceClips.com looks at some of the stories that helped characterize 2014.

Mount Polley to the breach

Even British Columbia’s environment minister called it a disaster. The August tailings dam collapse at Imperial Metals’ (TSX:III) Mount Polley copper-gold mine presented Canada’s mining industry with its own Exxon Valdez as a river of effluent, later estimated by the company at 24.4 million cubic metres, poured into the once-pristine Quesnel Lake watershed.

The dam’s original engineer was quick to disassociate itself. The current engineer and Imperial each implied the other might be at fault. There were suggestions that the company and the province should have known something was wrong as far back as 2010.

A mining and exploration retrospect for 2014

B.C. appointed a panel of engineers to investigate. B.C.’s Inspector of Mines began a separate investigation. And B.C.’s Information and Privacy Commissioner launched its own investigation—into the government.

B.C. also ordered third-party inspections of 98 tailings facilities at current and former mines. The Canadian Nuclear Safety Commission requested companies report on their uranium tailings facilities.

Alaskans, meanwhile, questioned whether B.C. had the wherewithal to prevent downstream pollution from potential mines in the province’s northwest. A Vancouver Sun study found that the BC Liberal government cut mine inspections by more than half since coming to power in 2001.

Imperial has so far committed $67.4 million towards the disaster. In late December the company announced the sale of a 93-kilometre transmission line extension to the government-owned BC Hydro for $52 million.

B.C.’s performance as a mining jurisdiction

Mount Polley’s shutdown brings to mind the governing BC Liberals’ frequent reminder that more mines closed than opened when the NDP held power. So how’s the province doing under the current regime? According to a list provided by the Ministry of Mines and Energy, seven mines opened since 2001, when the BC Liberals gained power, while five shut down. One mine closed and re-opened. Another seven mines opened and closed. At least one omission in the last category, however, was Treasure Mountain which opened, closed, re-opened and re-closed.

Of course metal and coal prices play a crucial role. But during that period permitting problems plagued other potential operations, like Taseko Mines’ (TSX:TKO) New Prosperity gold-copper project and Pacific Booker Minerals’ (TSXV:BKM) Morrison copper-gold-molybdenum project. Both were refused environmental permits, arguably on non-environmental grounds—New Prosperity by the feds and Morrison by the province.

On a more positive note, Imperial has its Red Chris copper-gold mine now in development. (Please get it right this time.) Seabridge Gold TSX:SEA won provincial environmental approval in July and federal approval in December for Kerr-Sulphurets-Mitchell (KSM), which the company says hosts “one of the largest undeveloped gold and copper reserves in the world.”

An engineering marvel puts Cigar Lake in operation

Evidently the mining industry calls for optimism and perseverance in abundance. That, along with innovation, is what it took for Cameco Corp TSX:CCO to finally bring its Cigar Lake uranium project into production in March. Encouraging the heroic endeavour is an ore grade 100 times the world average, suggesting that high grade is the mother of invention.

The Saskatchewan mine’s 33-year saga began with a 1981 discovery, then continued with a number of setbacks that stalled construction. Even after the mine’s widely celebrated opening, Cigar Lake shut down from mid-July to early September for remedial freezing. Majority-owner Cameco injects and freezes a brine solution around the rock body to prevent flooding through the Athabasca sandstone. Water jet boring then pummels the ore into a slurry.

But the company’s determination seems at odds with uranium’s price. When a Scotiabank analyst asked why Cameco was bringing new uranium into an oversupplied market, president/CEO Tim Gitzel replied, “We need the pounds. We’ve got sales commitments for those pounds.”

The uranium price tease

A mining and exploration retrospect for 2014

Chart: Ux Consulting

Among the most vociferous prophets of a new uranium order, Paladin Energy TSX:PDN managing director/CEO John Borshoff keeps revising his gotta-happen-soon predictions of rising prices. He’s not the only one, so Borshoff was probably more frustrated than embarrassed when uranium once again proved him wrong.

The recalcitrant commodity seemed to perk up in early August, with a spot price indicator that rose 25% by late October. A nearly 90-degree ascent to $44 by mid-November seemed to justify Borshoff’s outlook. Alas, fickle uranium let down its believers, along with its price.

Borshoff’s boosterism, however, is backed up by others including Cameco’s Gitzel and David Talbot of Dundee Capital Markets, who in November stated, “We have always said, just like in 2006-2007, when [longer-term] contracting begins and the price moves, it will move fast.”

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