1. GMF
GLOBAL MINING FINANCE

2. NORTH AMERICA REGIONAL PROFILE
ritish Columbia is Canada’s for decades. The result is an industry
Gateway to the Pacific, with the living on past successes.
government investing more Gavin Dirom, President and CEO of
than C$2.5bn to ensure that its ports the Association for Mineral Exploration
are modern, competitive distribution British Columbia (AME BC), says it’s
centres. That’s welcome news for BC’s urgent that new mines are brought into
mining industry, which exports 75% of production to replace ones nearing
its products, primarily to Asian markets, depletion. ‘The most fundamental
and accounts for most of the province’s indicator of [industry] success at the
port and rail traffic. end of the day is a new, fully permitted
But the bulk of this material comes operating mine,’ he says.
from mines built many years ago, as Randy Hawes, BC’s Minister of State
BC hasn’t had a new large metal mine for Mining, says the government has
built since 1997, despite favourable taken steps to encourage new mines,
geology and a respectable track record including rationalising and putting
of discoveries. Some projects were timelines on the environmental
stalled by the global financial crisis or assessment process, negotiating
escalating costs, while others have been revenue-sharing agreements with First
in the permitting pipeline off-and-on Nations, and funding investments in
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3. NORTH AMERICA REGIONAL PROFILE
geoscience and the electrification of Robert Dickinson, co-founder of the
a remote region of northwestern BC HD group, and his team have won many
hosting many of the province’s largest industry awards for their exploration
undeveloped deposits. and development efforts. One of their
‘We’re working with the federal early successes was Mt. Milligan, which
government to have a one-project, one- they advanced from a grassroots
assessment process that is robust yet prospect to the permitting stage
has predictability about when things before the project was acquired by a
get decided,’ says Minister Hawes. ‘We major company in 1990. Development
fully understand that capital moves to was stalled by a subsequent industry
friendly places.’ downturn, but the C$915m project is
The lack of new mines isn’t for lack back on track, based on a revised study
of trying, with Hunter-Dickinson (HD) with reduced technical and capital cost
companies doing the heavy lifting risk and 6 million ‘shovel-ready’ ounces
on this front for decades, including of gold allowing for fast payback of
developing the Kemess copper-gold capital costs.
mine currently owned by Northgate The proposed 60,000-tonne-per-day
Minerals Corp. and the Mt. Milligan (TPD) mine is expected to produce
copper-gold project now owned by 262,100 ounces of gold and 89 million
Terrane Metals Corp. More recently, HD pounds of copper for the first six years
company Taseko Mines Ltd. has revived of a 22-year mine life. Spokesman
and expanded the Gibraltar copper- Ryan King says the company expects
molybdenum mine and brought the to hear shortly whether Goldcorp Inc.
Prosperity gold-copper project to the will convert its 60% equity interest in
environmental permitting stage. Terrane into a participating joint venture
interest in the project. In the interim,
the company has met with several
large banks with respect to arranging
project financing. ‘The response is
overwhelmingly positive,’ says King.
‘This project has a great location so
there’s no need to wait for government
support for roads and power.’ Dickinson
says it’s satisfying to see Mt. Milligan
finally moving forward.
‘The EA approvals send out a positive
signal that mines can be permitted
in BC. We’re seeing more and more
companies, including the majors, back
working in the province.’
Taseko is focused on bringing one of
Canada’s largest undeveloped copper-
gold projects into production, while also
expanding annual production capacity
(to 115 million pounds of copper) at its
flagship Gibraltar mine near Williams
Lake. Situated in south-central BC, the
wholly owned Prosperity project hosts
830 million tonnes of reserves containing
7.7 million ounces of gold and 3.6 billion
pounds of copper (recoverable) within
a larger resource. Prosperity’s proven
and probable reserves are sufficient to
sustain operations for more than three
decades.
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4. NORTH AMERICA REGIONAL PROFILE
Taseko President Russell Hallbauer a significant producer of zinc, lead,
says Prosperity will be ‘one of the big gold, silver and other metals, as well
mines with long lives’ that helped build as of various industrial minerals and
BC’s economy. The project would also resource commodities. Several new coal
bring significant economic benefits mines have opened in BC, with others
to a region of high unemployment, restored to production. Teck Resources
according to a report prepared by the is Canada’s top coal producer, reflecting
Centre for Spatial Economics. Based on recent acquisitions and its long-lived
investments of C$1.1 billion, including mines in southeastern BC. Teck expects
C$800 million in capital costs, the to produce 23.5–25 million tonnes of
report estimates that the mine’s total coal in 2010, and is planning further
production revenues will exceed C$7 increases in 2011 and 2012 in light of the
billion, largely as exports, over just the tight market expected for high-quality
first 20 years. The mine would generate hard-coking coal. Copper Mountain
C$388 million in GDP annually, more Mining Corp. is reviving a historic mine
than three times BC’s fishing industry that produced 1.7 billion pounds of
and more than its film and television copper before its closure in 1996. The
industry. company owns 75% of its namesake
Brian Battison, VP of Corporate Affairs, project, with Mitsubishi Materials of
says the project ‘shines a light on the Japan holding the remaining interest.
connection between mining and the The road-accessible project hosts a
people’, as the Cariboo Chilcotin region current resource of about 5 billion
has long relied on mining and forestry pounds of copper. The company’s goal
as main employer. He added that is to develop a mid-tier mine producing
‘Support for the project is very strong, approximately 100 million pounds of
particularly in light of recent job losses copper and by-product precious metals
in forestry. There’s no debate left for by mid-2011.
the majority of the community. They Breakwater Resources Ltd. has
understand this project’s value.’ Some producing mines in Honduras and Chile,
First Nations leaders oppose the project, but has the distinction of operating
but Battison says the majority of First the only mine within a BC park. The
Nations people want the jobs and other company’s wholly owned Myra Falls
benefits the mine would bring. mine on Vancouver Island has operated
Another advanced project is New Afton, for more than three decades (including
which New Gold Inc. aims to bring into by Breakwater since mid-2004),
production by the second half of 2012. producing zinc, copper, lead, silver and
New Afton is an underground copper- gold. The mine exploits a cluster of
gold deposit found in recent years on volcanogenic massive sulphide (VMS)
the site of the historic Afton open-pit deposits, including several discovered
mine near Kamloops. It’s expected to in the 1990s that sustain current
produce an average of 85,000 ounces operations.
of gold, 214,000 ounces of silver and 75 Imperial Metals opened its Mt. Polley
million pounds of copper annually for copper-gold mine near Williams Lake in
12 years. the 1990s, suspended operations during
Abacus Mining & Exploration Corp. a market downturn, and reopened the
is advancing its nearby Ajax project open-pit mine in 2005 after making a
as a proposed 60,000-TPD open-pit series of discoveries with significantly
operation producing an average 106 higher grades than previously mined
million pounds of copper and 99,400 deposits. The company also owns 50%
ounces of gold in concentrate annually. of the producing Huckleberry copper-
Other companies have revived or molybdenum mine near Houston.
plan to revive historic mines and Imperial has a long and successful track
thereby sustain BC’s status as Canada’s record in exploration and is applying
largest copper and coal producer, the those talents to a portfolio of projects,
only producer of molybdenum, and including the recently acquired Red
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5. NORTH AMERICA REGIONAL PROFILE
Chris Project in the Iskut region of infrastructure for the development of its
northwestern BC. The project was first nearby Schaft Creek deposit, originally
worked in the 1960s, and more recently discovered in 1957. A 2008 preliminary
by various junior companies before being feasibility study estimated that minable
acquired by Imperial. A 2005 feasibility reserves of 812m tonnes could produce
study for Red Chris showed positive 4.8bn lb of copper, 255.1 million pounds
economics based on minable reserves of molybdenum, 4.5 million ounces of
of 276 million tonnes grading 0.349% gold and 32.5 million ounces of silver
copper and 0.266g gold per tonne (g/t), over a 23-year mine life.
over a 25-year life. Subsequent drilling Gold deposits continue to attract
has returned several long mineralised the interest of BC-based companies.
intersections: notably 1,024.1 metres of Hawthorne Gold Corp., led by mining
1.01% copper, 1.26g/t gold and 3.92g/t veterans Richard Barclay and Michael
silver; and 1,265 metres of 0.62% copper Beley, has three advanced projects: the
and 0.82g/t gold. Imperial’s deep drilling Table Mountain and Taurus projects
programme, designed to follow up in the Cassiar gold camp of northern
previous holes that ended in high-grade BC, and the Frasergold project in the
mineralisation, has been a remarkable Cariboo district. The company’s goal
success. One recent hole returned is to become a gold producer, starting
152.5 metres grading 4.12% copper and with the Table Mountain deposit.
8.83g/t gold, starting at 540.0 metres. Skygold Ventures Ltd., (now Spanish
Patrick McAndless, VP of Exploration, Mountain Gold Ltd.) is advancing its
says the results support potential for a Spanish Mountain gold project in the
high-grade underground mine as well Cariboo district. The project hosts
as the initially proposed open-pit mine. a current measured and indicated
‘These are some of the most spectacular resource of 102.26 million tonnes
intersections for a porphyry deposit in grading 0.785g/t gold (or 2.58 million
BC.’ McAndless says the proposed 30,000- contained oz) plus an inferred resource
TPD project will benefit from the BC and (290,000 ounces of gold). The company
federal government’s commitment to is excited by the potential of Spanish
fund a power transmission line along Creek, which was acquired based on its
the Highway 37 corridor in northwestern sediment-hosted gold possibility along
BC, claiming ‘That’s what will make this trend of the flagship Spanish Mountain
project work.’ project. After the discovery of the
The power line will benefit other Thunder Ridge Zone, where drilling
historic discoveries in northwestern BC returned 45.59g/t gold over 2.5 metres,
that remain undeveloped because of a the focus evolved to a high-grade gold
lack of roads and other infrastructure. target that is being further tested.
Galore Creek, one of the world’s largest BC is prospective for a broad range
and highest-grade undeveloped copper- of mineral deposit types, including
gold-silver deposits, was poised for a some unusual targets. One example is
production decision several years ago the Blue River tantalum and niobium
by 50/50 partners Teck and NovaGold project being explored by Commerce
Resources, until escalating capital costs Resources Corp. near Kamloops. The
forced a rethink of project parameters. company recently announced an
The partners are now examining a updated resource estimate for the Upper
smaller-scale project with lower capital Fir deposit at Blue River, confirming
costs, with potential to produce 350– sufficient tonnage to move the deposit
700 million pounds of copper, 250,000– into the development stage. Tantalum
500,000 ounces of gold, and 3–5 million is mainly used in electronics; niobium is
ounces of silver annually in the initial 5– mainly used in the steel industry. These
10 years of operation, with an operating and other projects show that BC is rich
life exceeding 17 years. Copper Fox in resources. All that’s needed are some
Metals also applauds the C$130m large new mines to sustain its status as
power line as it will provide important a major producer to global markets.
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