Engineering & Mining Journal

DEC 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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74 E&MJ • DECEMBER 2018 MINING IN ONTARIO has invested billions of dollars into the mining industry since being established in 1957. Jonathan Goodman, Dundee's current chair- man and CEO, noted that as only around 25% of mines make money during a mining cycle, investors need to be selective and analyze a variety of factors and data to determine whether or not an investment opportunity is solid: "Many things go into a successful investment in the mining industry. It goes beyond just strong geology. Success in the mining industry requires synergies between engineering, design, development, construction and community relations." In 2016, Shaun Usmar decided to leave his role as senior execu- tive VP and chief financial officer at Barrick Gold and establish Triple Flag Mining Finance. Triple Flag's first deal was a C$250 million silver streaming deal with Nexa Resources on its Cerro Lindo mine, followed by bilateral deals with Steppe Gold and Nevada Copper, and more recently a C$200 million deal to acquire an extensive royalty portfolio from Centerra. When asked how Triple Flag has managed to compete with established players in the financial services sec- tor, Shaun responded: "We have experience and knowledge within the mining industry, with a large and sophisticated financial backer (Elliot Management Corporation) that enables us to offer beneficial services at a competitive cost of funding to prospective partners." Another new player making waves in the market is Cobalt 27, a company established with the aim of creating a platform that gives investors exposure to the electric vehicle (EV) space. After going pub- lic in June 2017, Cobalt 27 exercised 16 contracts and bought the world's largest physical position of cobalt outside of the Chinese gov- ernment, worth over C$300 million today. Since then, the business has evolved from a physical starting point into a royalty and stream- ing entity, highlighted by the C$300 million deal which saw Cobalt 27 buy a percentage of the cobalt production from Vale's Voisey's Bay mine in Labrador. Mining 2.0: Sustainable Cash Flows Has New Meaning By: Dean McPherson Head, Business Development, Global Mining Toronto Stock Exchange & TSX Venture Exchange It is no secret that the end of the most recent mining cycle left the sector with a bruised reputation. Lower investment returns, combined with environmental concerns and substandard gen- der diversity practices, all served to feed negative public per- ception. On the heels of the commodities boom of the early 2000s, it could also be said that the sector was plagued by the irrational exuberance and hubris of the previous period. As a result, the general sentiment was that many investors, millennials, in particular, were reluctant to invest in the sector. Heading into 2018, stakeholders were in agreement: the mining industry needed to embrace progress and effect posi- tive change to restore the image of the sector in the eyes of investors and the public. This year, we've made great progress on the road to recovery. In fact, I would say we're entering "Mining 2.0"; a new age of responsible and innovation-based mining, fueled by new sources of demand. The Momentum Builds for "Mining 2.0" - Mining in 2018 and beyond With the modern investor in mind, mining companies have taken necessary steps to evolve and align the mining sector with global trends; placing an increased focus on corporate social responsibility (CSR), gender diversity and innovation. Organizations like Women Who Rock and Women in Min- ing are relentlessly advocating to increase and diversify the talent pool. Their grass-roots efforts are gaining widespread support from stakeholders and companies as women are en- couraged to pursue leadership careers in the mining industry. Innovation is a constant pursuit in any industry and mining is no exception. Companies are continuously seeking ways to optimize existing processes in order to deliver value to their bottom-line. Recent innovations include using drone technol- ogy to make aspects of exploration more efficient and utilizing new water-saving methods to process ore, as well as automa- tion efforts in extraction and transportation. Mining is the foundation of the future; infrastructure and technology advancements are possible because of mining. Like many aspects of modern society, the mining sector has undergone a reckoning and realised it can do better. There is potential for all stakeholders to benefit as the mining industry advances. It took a supercycle and a prolonged downcycle to create our own type of revolution; however, I think we can all agree the future is looking brighter with "Mining 2.0." This article is provided for information purposes only and is not in- tended to provide any type of advice. This article is not an endorsement or recommendation of any specific securities in any industry nor is it an invitation to purchase securities listed on TSX Venture Exchange or Toronto Stock Exchange. Listing on TSX Venture Exchange or Toronto Stock Exchange does not guarantee the future performance of a secu- rity or an issuer.

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