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or the fourth year Osisko has taken our winter cover position, and it’s certainly been an exciting four years in the growth of the company. We’ve watched the junior explorer grow to separate itself from the pack of companies looking for mines to the select few who have found them. And what a mine they have found. Osisko Mining Corporation is owner of one of the largest gold reserves ever discovered in the Province of Quebec, and is again distinguishing itself by developing and preparing to become the operator of one of the largest annual producers of gold in North America by Q2 2011. Reviewing the last three years of our magazine’s coverage of Osisko, we can say without a doubt that they have said what they would do and done what they have said. Canadian Malartic is a world class gold mining operation that will position Osisko as the next global mid-tier producer. Having raised nearly $1 billion in the last 12 months, Osisko is fully funded and was fully permitted in August to commence the mine build scheduled to be completed by the second quarter of 2011. As has become their style, we have no doubt they will meet their objective.
4 Planning for Profits | Report on Mining | Winter 2009
Credit: Daniel Rompré
Dramatic payoff from experienced management The Osisko management team is justifiably proud that they have been able to move rapidly through all of the important milestones of mine development; from the first drill hole in March of 2005 to a completed feasibility study in 2008, fully permitted in August 2009 and the start of construction in September. Few mining companies have ever advanced a mega project like Canadian Malartic so quickly. Lead by President and CEO Sean Roosen, the company today has combined experience of over 400 years in developing, building and operating precious metal mines. Mr. Roosen started down the track to discovering the world class Canadian Malartic deposit back in 2003 with Robert Wares, COO and John Burzynski, VP Corporate Development. Following the 2005 discovery and with the addition of Bryan Coates, VP Finance and CFO in 2007, the team was ready to start building and financing the company to move from explorer to developer. The addition of a seasoned and experienced mine design, construction and operations team headed up by Luc Lessard, VP Engineering and Construction, completed the team and has allowed Osisko to position itself as a significant near-term producer. www.ReportOnMining.com
Osisko has taken a bold and innovative initiative by creating a sustainability fund currently valued at $3 million, with plans to reach $10 million in the next 10 years. The company stayed well ahead of schedule by ordering long lead time equipment well in advance, reducing price risk and construction delays that allowed August 20, 2009: Quebec government authorizes construction of Osisko’s Canadian Malartic gold mine for the smooth transition from exploration through construction From left to right, Mr. Sean Roosen, President and CEO, Osisko Mining Corporation, Mr. André Vézeau, Mayor of Malartic, Mr. Serge Simard, Minister for Natural Resources and Wildlife, and Mr. Pierre Corbeil, to production in the second local MP, Minister responsible for Aboriginal Affairs and Minister responsible for the Abitibi-Témiscamigue quarter of 2011. Along with the region and the Nord-de-Quebéc region. right people and a focused and supportive local and provincial government, these factors were the main ingredients to their success. This build will be Lessard’s eleventh mine and largest to One of the few remaining risk elements to the project, the date. To move from initial exploration to final construction in only four years speaks volumes about the expertise and construction phase, is expected be completed in Q2 2011. experience of the full management team at Osisko. Generally The company has flawlessly executed their development plan anticipating potential delays and mitigating them well a task that may take up to 10 years or more, the sheer speed of progress on the Canadian Malartic project has astounded in advance. The majority of the long lead time equipment is on site and is being assembled, including a 38-foot SAG mill, many industry veterans. Over the past four years Osisko has completed a massive (the largest in Canada), one of two 400-tonne shovels, two of the three 24-foot Ball Mills and the first of the massive drilling program of over 650,000 metres, which is still continuing at a rate of over 15,000 metres per month. The company has 220-tonne haul trucks for the mining fleet is being built. The foundations for the SAG mill, the truck shop and raised nearly one billion dollars to fund the development and construction phases of the project, most of that over the past the administration office are being poured, the road to the 12 months and in the heat of a global financial crisis. To access crusher has been started and the dam for the polishing pond the mine site it was necessary that a major portion of the Town is nearing completion. All of this happening only one month after getting provincial approval for construction is another of Malartic was relocated and rebuilt. This included moving testament to the depth of experience the management team 138 homes, building an elementary school, an elderly care facility and adult learning center, a daycare facility, subsidized brings to the development. housing units and a community center. The company turned the keys over to the mayor in early October.
Mining complex at completion in early 2011.
www.ReportOnMining.com
Winter 2009 | Planning for Profits | Report on Mining 5
Mr. AndrĂŠ Vezeau, Mayor of Malartic and Mr. Sean Roosen, President and CEO, Osisko Mining Corporation, officially inaugurating Malartic new neighbourhood.
Osisko management has been able to fast track the exploration and development process so that it has been completed in the same single cycle – an almost unheard of feat. The net effect is one of reducing uncertainty and increasing shareholder value. Head and shoulders above the competition Osisko Mining Corp offers excellent value when compared to other similar stage companies in the gold sector. The Canadian Malartic mine will come online before any others of its size currently under development and the feasibility study published in November 2008 indicates a relatively low cash cost of production of only U.S. $319 per ounce. Comparable costs at similar sized mines are close to U.S. $500 per ounce, creating a very attractive investment criterion.
The Canadian Malartic deposit contains 6.28 million ounces of proven and probable resource, 3.65 million ounces in the measured and indicated category (including South Barnat) and 0.84 million ounces as inferred resource. This makes the Canadian Malartic deposit the largest reserve in Canada and the sixth largest in North America. An updated NI 43-101 compliant resource estimate for the South Barnat is anticipated by year end and is expected to move a large portion of the resource into the proven and probable category. A combined Canadian Malartic-South Barnat resource estimate will also be released at that time as well. Osisko has identified five additional mineralized zones surrounding the Canadian Malartic and South Barnat deposits.
Aerial view of Osisko’s Malartic regional office with orphaned East Malartic tailing ponds that Osisko and the Quebec Government will rehabilitate using material from the future mine. Construction
6 Planning for Profits | Report on Mining | Winter 2009
TEREX RH-340 hydraulic mining excavator.
www.ReportOnMining.com
Celebration was held at the elementary school, newly built with green technologies such as twenty geothermal wells.
The current exploration drilling program of over 15,000 metres per month (utilizing six diamond drills) will be continued on these zones in an effort to expand the known resource and extend the mine life beyond the current estimate of 10 years. The potential to increase the size and scope of this operation is excellent, with over 200 green field targets identified to date and the Canadian MalarticSouth Barnat deposits still open in a number of directions. The mine as planned will process 55,000 tonnes of ore per day, 20 million tonnes annually and produce approximately 600,000 ounces of gold on an annual basis. The feasibility study utilized a gold price of U.S. $775 per ounce and indicated CAPEX payback in only 36 months. With gold at U.S. $1,000 per ounce the payback period should be considerably shorter.
Two of the new institutional buildings, the adult learning center (above) and the day care facility (below).
Osisko has been able to raise a considerable amount of capital over the past 12 months, $550 million in equity, $225 million in convertible debentures and $241 million in the money warrants set to be exercised in November. An additional $75 million in warrants are due in November with a $7.90 strike price, just out of the money at the moment. All of this has positioned Osisko in an enviable position of being fully funded for construction well in advance, allowing the company excellent flexibility to continue to expand through exploration and through other strategic investments. As an indication of the potential value of Osisko shares, Goldcorp Inc. has taken a 12.5% position in Osisko. In September Osisko secured a $150 million credit facility through the CPP Investment Board subsidiary CCPIB Credit Investments Inc. The loan consists of two tranches.
Construction of mining complex under way.
www.ReportOnMining.com
Winter 2009 | Planning for Profits | Report on Mining 7
New neighbourhood
The first, Tranche A is for $75 million and may be drawn on October 31, 2009 for development of the Canadian Malartic project; Tranche B for $75 million will be available on March 31, 2010 for general corporate purposes. Both of these transactions are a strong endorsement by strong shareholders of management’s ability to establish Osisko as a premier intermediate gold producer. Looking ahead to the completion of construction when the mine is in full production, it appears that Osisko has a lot of upside when compared to companies in its peer group. Even though Osisko shares have increased over 240% since the market low of November 2008 (the best performing stock on the TSX in that one-year period) there is still considerable room for increased shareholder value as the market recognizes the full potential of Osisko as a premier globally competitive mid-tier gold producer. Management at Osisko Mining Corporation has proven to be very effective in bringing the Canadian Malartic deposit through the exploration and permitting stages. The company is well positioned to become the next major gold producer in Canada and has the financial muscle to bring the deposit into production without delay. Planning and execution of the development process has been completed on a fast track that is nearly unheard of in the precious metal mining industry. All of the potential hurdles were identified early and solutions created that are innovative and socially responsible creating a new bench mark for mine development in Canada and around the world. For investors looking for a precious metal company that continues to build value with proven management that is a near term producer and well financed, operating in a stable and mining friendly jurisdiction, with considerable growth potential through continued exploration, Osisko Mining Corporation should be at the top of their list. 8 Planning for Profits | Report on Mining | Winter 2009
Osisko Mining Corporation 1100 avenue des Canadiens-de-MontrĂŠal Suite 300, P.O. Box 211, MontrĂŠal QC Canada H3B 2S2 Phone: 514.735.7131 ir@osisko.com www.osisko.com TSX: OSK EWX: Deutsche Year Hi/Low: 9.24/1.40
www.ReportOnMining.com
“Gold was supposed to be a ‘barbarous relic.’”
“All of a sudden, the world’s tax haven nations have started buckling under pressure from the U.S. and Britain.” 10 Planning for Profits | Report on Mining |Winter 2009
www.ReportOnMining.com
www.ReportOnMining.com
Winter 2009 | Planning for Profits | Report on Mining 11
“Now I’m predicting $2,500 and quite possibly $5,000 after that. We’ll see how rapidly it gets there. I have a feeling its speed will surprise everyone — even me!”
12 Planning for Profits | Report on Mining |Winter 2009
www.ReportOnMining.com
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Carolina Mining – an old tradition, a new opportunity
R
omarco Minerals, an emerging gold producer, is developing one of the most significant gold districts identified in the U.S. in the past decade. The Haile Gold Mine is located in Lancaster County, South Carolina — a region where gold was first identified in the U.S. and the sole source of U.S. gold production prior to the California gold rush of 1849. The gold production from the Carolinas was so significant that the government placed the second U.S. Mint in Charlotte, North Carolina. Today in downtown Charlotte stands a statue of commerce of a gold panner and the trolley cars have the name “Gold Rush” emblazoned on the sides. The rich history of gold gave Charlotte the name “the city with streets paved of gold” and led to it evolving into a financial banking center, second only to New York. Forestry is the predominate industry in SC following closely by mining. While the last gold production was from the Ridgeway Mine (1999, Kennecott), there are nearly 500 active mines in South Carolina today — primarily industrial minerals and aggregates. The Slate Belt of the Carolinas is a unique geologic feature which hosts a wealth of mineral potential including many historic gold mines. The Haile Gold Mine was the first heap leach operation east of the Mississippi River and was mined for sulfur for explosives during the Civil War. The only modern day mining occurred in the 1980s from near surface shallow oxide deposits (approximately 85,000 ounces of gold).
14 Planning for Profits | Report on Mining | Winter 2009
Since acquiring the project in 2007 from Kinross Gold and other private landowners, Romarco has completed over 50,000 metres of drilling, identified a resource of over 4 million ounces, a proven probable reserve of approximately 2 million ounces at 2.7 g/t, increased its land position five-fold to over 3,000 acres, and delivered a feasibility study. The project site is located on private land and is not subject to any royalties. The feasibility study proposes a 7,000 ton per day, open pit operation using a conventional mill circuit — crush, grind, flot and carbon leaching the flot concentrate. Due to the significant increase in the gold resource identified through the 2008-2009 exploration program, the facility is being designed to double throughput. A bankable feasibility study will be completed in February 2010 accompanied by a new reserve update. The company intends to begin construction early Fall 2010.
www.ReportOnMining.com
Historic marker at the Haile Gold Mine, above and right, Haile Gold Trend, top right.
The Haile mineralized corridor remains open in all directions and at depth — the company has recently acquired additional lands along strike which host historic gold resources drilled during the 1970s–90s. The 2009 exploration program consists of 85,000 metres (250,000 feet) of drilling. Future years programs will likely increase in size given the numerous drill targets remaining on the project site and the current mineralized zone remaining open. www.ReportOnMining.com
The company has established that it is developing a gold district in the region. Permitting is well underway with only 10 permits remaining to be granted. There is tremendous local and state support for the project as this particular county has extremely high unemployment resulting from plant closures in the textile industry over the past few years. Romarco has C$55 million in cash, no debt, an experienced management team, and a highly skilled operating team — coming predominantly from Barrick Gold and Freeport McMoran. Our institutional shareholder base is led by Sun Valley Gold, Sprott Asset Management, US Global Investors, Franklin Templeton, Baker Steel and a variety of other strong positions held by North American and European institutions for a total institutional ownership of 80%.
Romarco Minerals Inc. 997 Greg Street Sparks, NV, USA 89431 Phone: 1.775.355.1900 surton@romarco.com www.romarco.com TSX.V: R Year Hi/Low: 1.31/0.095 Winter 2009 | Planning for Profits | Report on Mining 15
Lovitt Resources Inc. (LRC.V) is a junior resource company with a senior gold mining property owned by its wholly-owned subsidiary, the Lovitt Mining Company of Wenatchee, WA. The Lovitt gold mine produced 420,000 ounces of gold and over 600,000 ounces of silver between 1950 and 1967 at an average grade of 17 grams of gold and 25 grams of silver per ton. Operations were suspended in 1967, due to expenses rising with inflation and gold fixed by the U.S. government at $35 per ounce. The Lovitt Gold Mine was the sixth largest gold producer in the U.S. in the sixties.
Several major mining companies explored the Lovitt Mine properties in the 1970s, 80s and 90s, such as Cyprus Anvil, Teck Corporation and Asamera Minerals, Inc. Asamera operated the Cannon Mine which directly adjoins the Lovitt property. The Cannon Mine produced 1.2 million ounces of gold and 2 million ounces of silver between 1985 and 1994. These leading mining companies assembled a wealth of geological and engineering information now in the possession of Lovitt. These companies concentrated on the open pit potential, whereas current management is concentrating on the historic HIGH GRADE/HIGH PROFIT potential of the mine.
16 Planning for Profits | Report on Mining | Winter 2009
Lovitt Mine produced 420,000 oz. of gold and 650,000 oz of silver between 1950 and 1966 Cannon Mine produced 1,200,000 oz. gold and 1,600,000 oz. of silver between 1985 and 1994
The Lovitt Gold Mine has over seven miles of tunnels on nine levels, from the 850 foot elevation to the 1550. To reproduce these mine workings today would cost in the order of $40-50 million. Other major assets of Lovitt include 272 acres of freehold land on the Wenatchee city limits, 100% mineral rights to 250 acres, 70% mineral rights to 300 acres, water rights, buildings, and high tech equipment. At recent price levels, the stock is trading below its real estate value, giving excellent gold leverage to early investors. Lovitt Mining re-activated exploration in the summer of 2008. In September 2009, the company announced the discovery of serious tonnage in an area within the mine known as the I-49 stope. Archived mine maps show that this material could be continuous from about the 1350 level down to the 1190 area. The surface of this blasted potential ore covers an area of 180 feet X 210 feet, with assays on a portion of the surface returning values which averaged 7.9 grams of gold per tonne. The company is currently completing the I-49 surface sampling and intends to begin a diamond drill program as soon as equipment can be mobilized, to test upwards to the sampled surface and downwards to depth. Remarkably, the ore potential of the Lovitt Mine was never tested to depth. The area of initial interest is the blue area below the I-49 in the diagram at the top of the next column, after which other potential deep zones will be drilled. www.ReportOnMining.com
The chart at right ilustrates in percentage terms, recent stock performance of LRC.V in relation to a popular index of small cap gold stocks. Our undervalued status and aggressive ongoing exploration program should contribute to future superior market performance. Our share volumes on the TSX Venture Exchange have been growing strongly on a month to month basis, and with only 5,172,051 fully diluted shares outstanding, Lovitt Resources is highly leveraged to positive results. The company is also highly leveraged in gold, since a non-compliant 43-101 report by A.A. Burgoyne P.Eng in 1996 indicated an existing geologic resource of 423,522 ounces of gold contained in 3.591,669 tons grading 0.118 ounces of gold per ton. This is a historic resource and cannot be relied upon until reviewed, then verified by our continuing diamond drilling program to calculate and define a proven and indicated precious metal reserve. The Wenatchee area contains a gold zone seven miles long with high grade values encountered in diamond drilling at both ends of the zone, with the Cannon and Lovitt ore bodies in the center. With Wenatchee gold production already in excess of two million gold equivalent ounces, and with mineralization open at both ends of the zone, the area qualifies as a gold camp. Access to gold in the area by others may be best achieved by using the patented claims of Lovitt to reach any outside commercial gold reserves from underground, since Federally patented mining claims have special status in U.S. mining law, making the permitting process less onerous.
www.ReportOnMining.com
Lovitt Resources Inc. intends to be active in helping to define the Wenatchee Gold Belt, in addition to the 250 acres with 100% mineral rights and 300 acres with a 70% mineral interest, already held in the area. The company intends to add to its mineral interest in the Wenatchee Gold Belt in the near future.
Lovitt Resources, Inc. Contact: Lorne Brown, President 708-1111 West Hastings Street Vancouver, BC Canada V6E 2J3 Phone: 604.725.9952 Fax: 604.626.4748 Email: info@lovittresources.com www.lovittresources.com TSX: LRC.V Year Hi/Low: $0.42 - 0.135
Winter 2009 | Planning for Profits | Report on Mining 17
R
unning Fox Resource Corp. is a Canadian small-cap resource sector company with mineral exploration projects in its gold and uranium mineral division, oil and gas exploration and production division, and cash flow oilfield services and technology division.
2008 revenues exceed $9.3 million. New gold and precious metals and other mineral properties, oil and gas projects, and acquisitions of cash flowing companies are being reviewed. New technologies are being developed/tested in the oilpatch. Canadian High-Grade Gold Project The company is looking forward to Running Fox drilling their High-Grade Gold Development-Brett Gold Project, Okanagan Valley, British Columbia. Gold Mining Canada Silver Mining Gold Gravity Concentrator. Plans include to follow-up on previous drillhole #RC9319, which returned a significant intersection of:
• 55 feet of 1.045 oz Au/ton (16.76 m grading 35.79 gms Au/tonne) including 3.048 m grading 57.88 gms Au/tonne (1.69 oz Au/ton) and 4.57 m grading 107.88 gms Au/tonne (3.15 oz Au/ton) within the main shear zone. (see 43-101 Technical and Brett Gold Assessment Reports located under the www.foxgold.ca website “Brett Property” tab.)
18 Planning for Profits | Report on Mining | Winter 2009
In our last drilling program 15 out of the 17 holes drilled intersected significant gold bearing intersections including the following: • Diamond Drill Hole #04-01 intersected 33.5 feet grading 0.154 oz/t Au including 5.5 feet grading 0.640 oz Au/ton; and • Diamond Drill Hole #04-02 intersected 38.1 feet grading 0.303 oz Au/ton including 10.2 feet of 0.992 oz Au/ton. More importantly, Diamond drill hole #04-12 intercepted
4.3 feet grading 5.104 ounces per ton gold, (check assay performed) plus two other significant but lower-grade (0.03 ounce to 0.07 ounce per ton gold) intercepts. This new zone, located on a tuffaceous bed, is located 160 feet (53 metres) east of the main shear zone and represents a totally new zone as none of the previous drill holes went as far east as this hole. The zone is cut off by several postmineral dikes in the core, possibly indicating the presence of a second parallel shear structure. If so, this would be the first confirmation of bonanza high-grade gold values (greater than one ounce per ton gold) on a parallel shear structure, opening the possibility that similar high-grade zones may be present, along the numerous other shears identified during surface work. The entire strike length of the shear zone is unexplored as none of the previous drill holes were near its projection. The program opened up large areas for exploration and the development of additional gold bearing zones. www.ReportOnMining.com
Complete maps, geochem, and drilling history are available for review/download on the Running Fox website. The project has significant early stage block calculations on a small portion of one shear zone — and there are many shear zones, running under large undrilled geochem zones with good gold values over large areas (see geochem in Assessment Report). Canadian Oilfield Services and Natural Gas Exploration and Production Since 2005, Running Fox has participated in the development of the Pincher Creek project and since that time has been producing natural gas and condensates. Over the years, the Pincher Creek project has yielded average revenue of $1million per year to Running Fox’s interest from a horizontal well in a conventional deep long-life gas zone in the Livingston formation. The company earns the majority of its revenues from value-add oilfield services. New Black Shale Play Further to company news, on October 8, 2009, a new black shale, natural gas production opportunity appears to be developing in southwest Alberta where Running Fox Resource Corp. has an interest in the 28-square-mile Pincher Creek natural gas project. Similar to many sedimentary basins in the United States with black shale that are currently experiencing extensive exploration drilling for natural gas, it has been recognized that the Jurassic-age Fernie Group in Alberta also contains thick sequences of highly organic, shale, natural gas source rock. Uranium and Vanadium Project New Mexico USA - Diamond Drilling On Running Fox New Mexico Uranium Project Running Fox has been notified of the diamond drilling permit applications filed by its Joint Venture partner who is earning an interest in Running Fox’s New Mexico Uranium Project located in the United States. The partner is earning up to a 50% interest by expending $600,000 U.S. in exploration and drilling, and by paying Running Fox up to 3.5 million shares (2.5 million shares having been received to date). Diversified Resource Opportunities The company has upside leverage to important commodities including oil and gas, uranium and gold. Running Fox is a Canadian growth-oriented small cap company.
www.ReportOnMining.com
The company is developing four key divisions: • Environmental Services/Encapsulation/Remediation • Oil and Natural Gas Exploration and Production • Energy Sector Oilfield Services and Technology, and • Uranium and Gold Exploration Mineral Projects The company has approximately 41 million shares issued and outstanding and trades on the Toronto Stock Exchange–V, with recent share prices between 20 and 30 cents. * Note: Source for all drill intercepts are 43-101 Technical and Brett Gold Assessment Reports available at www.foxgold.ca and on SEDAR.
Running Fox Resource Corp. Contact: Michael Meyers, President 44 Ave and 46th St., Box 1316 Stettler, Alberta Canada TOC 2LO Phone: 403.742.0527 Mobile: 604.725.8868 Email: info@foxgold.ca www.foxgold.ca TSX: V RUN
Winter 2009 | Planning for Profits | Report on Mining 19
C
laim Post Resources is a junior exploration company that is primarily focused in the West Timmins Gold District in the Porcupine Mining Camp located in the Timmins area of Northern Ontario. With a vast land position of more than 152 square kilometres the company is one of the largest land holders in the region. (Figure 1) In late 2008 Claim Post contracted the services of MVW White and Associates Ltd. to analyze 24 townships that make up the Porcupine Mining Camp. A total of 560 files were merged into 40 computerized layers and were analysed by the company. One of the layers is a radiometric anomaly of the Timmins Camp that was generated out of airborne surveys and supplemented with hundreds of whole rock samples from out crop and DD core. With the culmination of 100 years of geological data a new theory on the Camp has emerged. MVW Whites’ anomaly signals that the Porcupine Mining Camp may be much bigger than originally thought. It also provides Claim Post with a unique focus for gold exploration in the West Timmins Gold District and the main areas of the Porcupine Mining Camp. (Figure 2)
Figure 1
Historically most gold zones are related to faults and the ‘Rim’ represents 30 miles of new structure in a proven gold camp. Claim Post has staked about 40% of the western perimeter and all open interior claims over the last five years. The company’s exploration programs will focus on targets along the margins of the radiometric anomaly plus both gravity and magnetic anomalies that lie within the interior of the anomaly. From an exploration standpoint, the new gold discovery by Amador Gold Corp. in Loveland Township confirms that not all gold zones in the region are confined to the Destor.
Figure 2
Figure 3
The radiometric anomaly identified by MVW White and Associates Ltd is one major step forward in explaining why the Timmins Gold System has produced more than 70 million ounces of gold to date. Overlying the Porcupine Destor Fault System, with well-known faults like the Aconda Lake and Kamiskotia faults plus drill holes on the radiometric anomaly, shows that the margins of the radiometric anomaly may be unrecognized shear zones off the Porcupine Destor Fault. (Figure 3)
One of the major advantages of the radiometric anomaly is that it gives a visual picture of the extent of the Porcupine Camp gold hydrothermal system. The potential gold system is much larger than the narrow corridor along the Porcupine Destor fault which has formed the basis of most current and historical exploration for gold in the Timmins area. The conclusion of the analysis shows that the region is still underexplored almost 100 years after gold was originally discovered in the area. (Figure 4)
20 Planning for Profits | Report on Mining | Winter 2009
www.ReportOnMining.com
Figure 6
Figure 4
Part of the Claim Post’s strategic plan is to bring in strong partners to develop its land position. On September 28, 2009, the company signed an exploration agreement with Osisko Mining Corporation to explore Claim Post’s wholly owned Mountjoy Property. (Figure 5) The Mountjoy Property consists of 105 claim units or roughly 15 square kilometres and is located just west of the town of Timmins. Through the signing of the joint venture agreement there has been some validation of the proposed new theory of the Porcupine Mining Camp; the Mountjoy claims are in the heart of the radiometric anomaly. Under the guidance of the agreement Osisko has the right to earn into 50 percent interest in the property by completing $4 million dollars of work and up to 70 percent interest by funding a discovery through to production.
There has been a renewed interest in the West Timmins Gold District with the merger of Lakeshore Gold and West Timmins Mining and with the new discovery by Amador Gold Corp. (Figure 7) Claim Post Resources is well positioned as the company has continually staked ground for the last five years. Currently the company is a reporting issuer and has a target to be trading on the TSXV in the near future.
Figure 7 Figure 5
Claim Post‘s property position on the western extension of the ‘Rim’ and around Kamiskotia Lake also has the potential to host Volcanic Massive Sulphide (VMS) deposits such as the Kam Kotia Mine or the giant Kidd Creek Mine. The Kamiskotia Property hosts 17 Megatem deep EM anomalies that are ready to be drilled and are the focus of the company’s proposed exploration program. The company will be splitting their exploration budget with 50% going to gold exploration and 50% to drilling VMS targets. (Figure 6) www.ReportOnMining.com
Claim Post Resources Inc 1010 Suite - 55 University Avenue Toronto, ON Canada M5J 2H7 Phone: 416.203.3776 Email: petergryba@hotmail.com www.claimpostresources.com
Winter 2009 | Planning for Profits | Report on Mining 21
R
ocher is a mineral explorer. The company has a flagship property in Arizona that consists of a huge open pit manganese (periodic symbol Mn) deposit. The project is designated Artillery Peak by the company; this project, when in production, will be the only source of manganese in the U.S. Manganese is a strategic metal that is vital to the steel industry. You cannot make steel without manganese. The deposit size, as per 43-101, 1.06 billion lbs. indicated (average grade 4.46%, cut off .91%) and 9.69 billion lbs. inferred (average 4.52%, cutoff .91%) contained Mn (see www.sedar.com). It is notable that the leaders in electrolytic manganese metal (EMM), the Chinese, use their lowest grade deposits to leach the manganese into solution. The company’s project is similar in execution. A Preliminary Economic Assessment has been completed. The report places the property as one of the lowest cost producers in the world. The cash cost of production is $.44 per lb. manganese. Rocher has acquired virtually the entire mining camp and through various agreements will control this vital strategic resource. The extraction process yields a 90% plus recovery of the Mn from the rock processed. The recovered Mn is processed into electrolytic manganese metal (EMM). This market is currently dominated by China. China produces 97.44% of the world’s EMM. EMM is used for higher-grades of steel. It is also used in the production of ferro manganese. Manganese has an interesting history in the United States. During the world wars of the 20th century, the importation of manganese was impossible and the demand was at its greatest. Submarine warfare had paralyzed ocean shipping. In these times of crisis domestic production was undertaken using the limited methods available at the time. Indeed the crises led to the early work developing the process that is used today.
22 Planning for Profits | Report on Mining | Winter 2009
The company commissioned a met test that has resulted in the successful production of manganese metal from the Artillery Peak ore. The method used is a slight refinement in the process to meet the requirements of our specific ore. The process is simple and cost effective. The management of the company is experienced and has an enviable track record of successes. The great opportunity offered by this project is the location and size of the deposit. Artillery Peak will be the only EMM producer in the U.S. Further, there is only one other producer outside China in the entire world. This operator is in South Africa and faces the many problems associated with that country. Currently South Africa’s problem is electric power. www.ReportOnMining.com
Site in Arizona left and above, site preparation in circle photos lower left.
The U.S. protects EMM by tariff; China additionally imposes an export tariff on the EMM in an effort to conserve it for domestic use. Another advantage this project enjoys is the cost of electric power. The cost of electrolysis is at minimum 50% of the cost of producing EMM. The power cost in China is higher than the U.S. South Africa is slated to undergo a dramatic increase in power cost of two to three times current rates. Artillery Peak has every advantage to succeed. Rocher has a portfolio of interesting mining claims; one property that is being drilled for the first time is a niobium deposit in BC. Niobium is an extremely valuable metal that is alloyed with steel. The metal is quoted at $43 per lb. ($95,225 metric tonne) this quotation is for the pure metal. The value of the metal is attributed to its rarity.
www.ReportOnMining.com
The project contains two surface showings four kilometres apart. Both surface deposits are significant. The Brent deposit is 119 metres in strike length, averaging .19% Nb2O5; the Lonnie is 500 metres in strike averaging .20% Nb2O5. In addition to niobium, there are other notable minerals present: titanium, lanthanum neodymium and zirconium. Drilling is currently taking place on the property.
Rocher DeBoule Minerals Corp. 2A 15782 Marine Drive White Rock, BC Canada V2V 4J1 Phone: 604.531.9639 Email: info@rdminerals.ca www.rdminerals.ca TSX.V: RD Year Hi/Low: $0.32 - 0.07
Winter 2009 | Planning for Profits | Report on Mining 23
24 Planning for Profits | Report on Mining |Winter 2009
www.ReportOnMining.com
Figure 1: US Dollar Index vs Gold & CRB Index (Nov. 1999 – Sept. 2009 monthly)
Source: Bloomberg
Figure 2: Commodity Prices in Global Recessions & Recoveries
Source: IMF World Economic Outlook, October 2009 www.ReportOnMining.com
Winter 2009 | Planning for Profits | Report on Mining 25
Figure 3: MSCI World Index vs. CRB Index and Baltic Dry Index (Nov. 1999 – Sept. 2009 monthly)
Source: Bloomberg
Figure 4: VIX vs. FAIL® and Gold (Nov. 1999 – Sept. 2009 monthly)
Source: Bloomberg 26 Planning for Profits | Report on Mining |Winter 2009
www.ReportOnMining.com
Figure 5: Gold to Copper Ratio (Nov. 1989 – Sept. 2009 monthly)
Source: Bloomberg
(Elvis Picardo is Vice President – Research, and a strategist and analyst at Global Securities Corporation in Vancouver. The opinions expressed herein are his own). www.ReportOnMining.com
Winter 2009 | Planning for Profits | Report on Mining 27
F
or four days every March, the mining world descends on Toronto to attend the international convention of the Prospectors and Developers Association of Canada (PDAC). Now in its 78th year, this annual gathering brings together those whose business is mining and mineral exploration: senior mining executives, prospectors, mining supplies and services companies, government representatives, financial analysts, brokers, lawyers, retail investors and many others. They come from more than 120 countries to network, make new contacts, and broker deals. Next year, the PDAC International Convention takes place from March 7 to 10 at the Metro Toronto Convention Centre. Some 18,000 delegates attended the 2009 gathering. The 2010 gathering will feature an extensive technical program, a Trade Show and an Investors Exchange. The first event of the convention, on Sunday March 7, is the commodities and market outlook, at which industry experts discuss their expectations for a range of minerals, including uranium, potash and gold. The following morning, the convention formally opens with a keynote session that will examine factors influencing exploration and development activities for the next decade. The focus will be on projected growth in China, India, Brazil and Africa, and on Canada’s opportunity to lead through the PDAC’s e3Plus program. A framework for responsible exploration, e3Plus includes environmental good practices and health and safety protocols. The technical program that runs throughout the convention offers a wide variety of presentations, from the economics of the global diamond industry to the geology of porphyry copper deposits. A morning session on aboriginal issues will focus on community engagement and consultation with aboriginal peoples in Canada and Latin America. There will also be presentations on project financing, world gold deposits, geophysics and the always popular new discoveries and developments. A major attraction of the convention is the Investors Exchange, where much of the world’s mining business is conducted. Here, some 650 mining and exploration companies showcase their results to investors. Companies can also discuss their latest discoveries and results at the Investors Forum and exhibit their samples in the Core Shack. 28 Planning for Profits | Report on Mining |Winter 2009
Photos clockwise: top left: Core Shack; top right: delegates; middle right: trade show floor; bottom right: exterior of exhibit hall; bottom left: opening ceremonies.
Alongside the Investors Exchange is the Trade Show, where upwards of 350 companies promote a range of products, such as helicopter services, camping equipment and mining publications. A major part of the Trade Show is its pavilions, large room-like areas where countries such as South Africa, Australia and Brazil, as well as the Canadian provinces and territories, promote their mineral potential. This year’s convention includes two prominent luncheon speakers. The TD Bank’s chief economist, Don Drummond, will address the opening luncheon Monday, March 8, while Donald Coxe, strategy advisor for BMO Financial Group, will speak at the final luncheon Wednesday, March 10. Students are particularly welcome at the convention, and organizers design special programs for them, such as luncheons, career workshops and exhibit floor tours, where they can network and hand out résumés. The convention is not all work. After hours, delegates enjoy a variety of social events, including the PDAC Awards evening, which honours those who have made outstanding industry contributions, and the “wrap” gala, a high-energy glittering event that brings the convention to an exciting close.
www.ReportOnMining.com
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The Fraser Instituteâ&#x20AC;&#x2122;s â&#x20AC;&#x153;Annual Survey of Mining Companies 2008/2009â&#x20AC;? ranked Manitoba in the top 10 jurisdictions worldwide for our mining policy attractiveness. Thatâ&#x20AC;&#x2122;s just one of the reasons why mineral production in Manitoba topped the $2.5 billion mark in 2008. The bottom line is: you donâ&#x20AC;&#x2122;t have to dig too far below the surface to discover that Manitoba offers you the right combination of deposits, infrastructure and policy to build your bottom line.
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Manitoba Mining and Minerals Convention 2009 "( $ + Winnipeg, Manitoba Canada Make plans now to attend this outstanding three-day event. This is your golden opportunity to meet other business leaders, entrepreneurs and geologists and learn all about the bottom line benefits of doing business in Manitoba. Free admittance Saturday, November 21st, 8:30 - Noon. To register, please contact: Manitoba Science, Technology, Energy and Mines 360-1395 Ellice Avenue Winnipeg, Manitoba, Canada R3G 3P2
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