Engineering & Mining Journal

MAY 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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2 E&MJ; • MAY 2018 FROM THE EDITOR In this month's edition, E&MJ; offers a profi le of the gold mining industry with reporting on the activity among the majors. The diffi culties the gold sector faces exemplify the issues affecting most of the mining industry, a lack of ex- ploration and development investment. The reserve base among the gold majors is shrinking and no new major dis- coveries have been made. That can be directly attributed to a lack of greenfi eld investment. There's no better place to get a feel for mining-related exploration and development investment than the Prospectors & Developers Associ- ation of Canada (PDAC) meeting, which is held annually in early March in Toronto, Canada — the mining investment capital of the world. During his presentation at the 2018 PDAC keynote session, Sean Roosen, chairman and CEO, Osisko Gold Royal- ties, touched on several of the salient factors explorers and developers face. Osisko Gold Royalties was created when Agnico Eagle and Yamana Gold acquired Osisko Min- ing Corp. and the Canadian Malartic mine — the mine on the cover of this magazine. Mineral exploration today is more diffi cult. Many prospectors believe that most of the easy-to-fi nd deposits have been discovered and the new prospects lie at depth. While there is some truth to that, the bigger problem facing explorers is a lack of investment. "There is less money available today," Rosen said. "In the past, people used to invest in prospectors and exploration because they wanted to take a risk and have fun. That money has moved to crypto currencies and 'weed' stocks, which is less regulated and more like a casino. We need to take a step back and re- gain those investors." Roosen asked the crowd: "How do we get the next generation of investors interested in our space?" Today, actively managed money is being challenged by passive funds. Billions of dollars are moving into index funds and quant trading, which mostly look backward at historical comparisons. "Without active management, we won't be able to fi nance projects," Roosen said. "You can't explain why you need $50 million to drill holes over here to a computer." Tongue in cheek, Roosen said he has tried to schedule meetings with these computers and it's diffi cult. Major mining projects are capital intensive and the money is no longer available. Shareholders are less likely to approve that $15 billion investment. Roosen believes the larger companies will have to return to the old playbook, where mining compa- nies enter joint ventures and syndicate bigger deals. "There is no long-term vision with today's investors and shareholders," Roosen said. "Only a few understand the importance of a 25-year investment. They are mostly Chinese and state-sponsored companies and they are buying a lot of things that we should own. Look what has happened in Canada. We have lost a lot of our status. We lost Falconbridge, Inco and Alcan. And, Goldcorp and Barrick are one-third the size they used to be." The development of natural resources is vital to the Canadian economy and Roosen is passionate about the mining business. Referring to his experience with Canadian Malartic, he explained that the only way to sustain rural communities, es- pecially those in northern Canada, is to develop assets that live and provide in their world. Future discoveries will require experienced geologists, boots on the ground, drill rigs turning and active investors. Competing for Investment Dollars In this month's edition, mining industry with reporting on the activity among the majors. The diffi culties the gold sector faces exemplify the issues affecting most of the mining industry, a lack of ex- ploration and development investment. The reserve base among the gold majors is shrinking and no new major dis- Steve Fiscor Publisher & Editor-in-Chief Steve Fiscor, Publisher & Editor-in-Chief sfi scor@mining-media.com Mining Media International, Inc. 11655 Central Parkway, Suite 306; Jacksonville, Florida 32224 USA Phone: +1.904.721.2925 / Fax: +1.904.721.2930 Editorial Publisher & Editor-In-Chief—Steve Fiscor, sfi scor@mining-media.com Associate Editor—Jennifer Jensen, jjensen@mining-media.com Technical Writer—Jesse Morton, jmorton@mining-media.com Contributing Editor—Russ Carter, rcarter@mining-media.com European Editor—Simon Walker, simon.emj@btinternet.com Latin American Editor—Oscar Martinez, omartinez@mining-media.com South African Editor—Gavin du Venage, gavinduvenage@gmail.com Graphic Designer—Tad Seabrook, tseabrook@mining-media.com Sales Midwest/Eastern U.S. & Canada, Sales—Victor Matteucci, vmatteucci@mining-media.com Western U.S., Canada & Australia, Sales—Frank Strazzulla, fstrazzulla@mining-media.com Scandinavia, U.K. & European Sales—Colm Barry, colm.barry@telia.com Germany, Austria & Switzerland Sales—Gerd Strasmann, info@strasmann-media.de Japan Sales—Masao Ishiguro, ma.ishiguro@w9.dion.ne.jp Production Manager—Dan Fitts, dfi tts@mining-media.com www.e-mj.com Engineering & Mining Journal, Volume 219, Issue 5, (ISSN 0095-8948) is published monthly by Mining Media International, Inc., 11655 Central Parkway, Suite 306, Jacksonville, FL 32224 (mining-media.com). Periodicals Postage paid at Jacksonville, FL, and additional mailing offi ces. Canada Post Publi- cations Mail Agreement No. 41450540. Canada return address: PO Box 2600, Mississauga ON L4T 0A8, Email: circulation@mining-media.com. Current and back issues and additional resources, including subscription request forms and an editorial calendar, are available at www.e-mj.com. SUBSCRIPTION RATES: Free and controlled circulation to qualifi ed subscrib- ers. Visit www.e-mj.com to subscribe. Non-qualifi ed persons may subscribe at the following rates: USA & Canada, 1 year, $90. Outside the USA & Can- ada, 1 year, $150. For subscriber services or to order single copies, contact E&MJ;, c/o Stamats Data Management, 615 Fifth Street SE, Cedar Rapids IA 52401, 1-800-553-8878 ext. 5028 or email subscriptions@e-mj.com. ARCHIVES AND MICROFORM: This magazine is available for research and retrieval of selected archived articles from leading electronic databases and online search services, including Factiva, LexisNexis, and Proquest. For mi- croform availability, contact ProQuest at 800-521-0600 or +1.734.761.4700, or search the Serials in Microform listings at www.proquest.com. POSTMASTER: Send address changes to E&MJ;, 11655 Central Parkway, Suite 306, Jacksonville, FL 32224-2659. REPRINTS: Mining Media International, Inc., 11655 Central Parkway, Suite 306, Jacksonville, FL 32224 USA; email: subscriptions@e-mj.com; phone: +1.904.721.2925, fax: +1.904.721.2930; www.mining-media.com. PHOTOCOPIES: Authorization to photocopy articles for internal corporate, personal, or instructional use may be obtained from the Copyright Clear- ance Center (CCC) at +1.978.750.8400. Obtain further information at copyright.com. EXECUTIVE OFFICE: Mining Media International, Inc., 11655 Central Park- way, Suite 306, Jacksonville, FL 32224 USA phone: +1.904.721.2925, fax: +1.904.721.2930, www.mining-media.com. COPYRIGHT 2018: Engineering & Mining Journal, incorporating World Mining Equipment, World Min- ing and Mining Equipment International. ALL RIGHTS RESERVED.

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