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PDAC | MARCH 4-7, 2012 exploration special
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February 2012
Editorial
Editor Gareth Tredway T +44 (0)20 7216 6084 E gareth.tredway@mining-journal.com
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Sub editors Vickie Johnstone / Woody Phillips
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Editorial director Chris Hinde
Chief executive officer David Nizol
Chairman Andrew Kent
EXPLORATION SPECIAL
Uncertain times as prospectors
and developers meet
AS USUAL, this Exploration
Supplement is timed to coincide
with the annual convention of the
Prospectors and Developers
Association of Canada (PDAC)
in Toronto (see city map on p8 for those of you
lucky enough to be attending).
It is hoped that this year’s PDAC convention will
establish yet another record attendance following last
year’s astonishing 27,000 delegates.
Moreover, over 600 exhibitors are again
booked into the Investors Exchange (with
140 companies making presentations), with a
further 340 exhibitors in the Trade Show.
However, PDAC will open on March 4 to
a still uncertain investment environment.
Although Greece has been granted a second
huge financial package, the euro crisis is far from
over. Many European economies are still tottering on
the brink between recovery and a dip back into
recession. Moreover, the picture is far from rosy
elsewhere, and experts are divided on the likely rate
CONTENTS
Uncertain times 3
Boom in non-ferrous exploration 4
Where to find companies in Toronto 8
Core exploration decisions 10
Leading the search for minerals 16
The search hots up 22
Responsible search for minerals 31
Metals markets poised 35
Company profiles:
Baja Mining Group 24
Batero Gold 26
CSA Global 28
EMED Mining 20
Lydian International 30
Mineral IRL 32
Moly Mines 34
Sika Resources 36
Advertisements:
AMEC cover
Augustine Louie 25
Aurizon Mines 38
Azmiuth Exploration 17
Blake, Cassels and Graydon 11
BMP Greenland 12
CSA Global 29
Fortuna Silver inside back cover
Paul Rizzo Associates 14
Primero 15
Schlumberger 5
Snowden Mining 9
SRK International 35
Stewart Group back cover
Thomas Mining Association 19
Centerra (TMP Worldwide) 2
TSX Inc 7
Cover design: Tim Peters
of growth in China, which remains the engine
for much of the world’s metals demand.
The difficult environment for prospectors
and developers was put into perspective in
this year’s PDAC brochure by Joe Hinzer (the
president of Watts Griffis and McOuat Ltd)
(left), who is again co-chair of the PDAC’s
Convention Planning Committee. He writes that “the
second half of 2011 was a period of political turmoil
in Europe, the Middle East and North Africa”, and
investors have been faced with “ever-increasing waves
of uncertainty”.
Advertising
Display sales executives
Leon Walton
T +44 (0)20 7216 6095 E leon.walton@mining-journal.com
Tom Peck
T +44 (0)20 7216 6085 E tom.peck@mining-journal.com
Aspermont UK, Albert House, 1 Singer Street,
London EC2A 4BQ, UK
Mr Hinzer notes: “The increasing price of gold is a
reflection of this turmoil.” Other metals have been
more vulnerable to the market conditions (see p35).
Nevertheless, the exploration sector has made
a strong recovery from the depths experienced at
the start of the global financial crisis. This improvement
is charted in an article on p4, and in the
summary of recent exploration activity on p22.
Advice on the selection of drill rigs is contained in
an article on p10.
Meanwhile, Mr Hinzer draws attention to a need
for “governments, financial institutions and companies
to adjust their strategies and ways of doing business
to accommodate the demands of citizens everywhere.
Societal risk has now become the greatest challenge
to any successful venture.” Some of these issues are
explored in a recent report from the World
Economic Forum (see p31).
Mr Hinzer notes that Corporate Social Responsibility
(CSR) has become the new catch-phrase,
encompassing all aspects of interaction between
society and business.
He adds that PDAC’s advocacy work “seeks to
address the fundamental issues affecting our industry
on both the local and global stage”. Part of this effort
has come through developing and distributing the
CSR e3 Plus Framework for Responsible Exploration.
Much still needs to be done, but the speakers,
exhibitors and delegates at this year’s PDAC will be
aware of the tasks ahead. They will hopefully learn
something to everyone’s long-term advantage.
This supplement is published with Mining Journal,
published weekly, which is available only as part of a
subscription with Mining Magazine and Mining, People
and the Environment, plus online access.
Annual subscription –
UK and Europe £360 (580 euros)
Rest of the world US$650
Published by Aspermont UK, Albert House,
1 Singer Street, London EC2A 4BQ, UK. Printed by
Stephens & George Magazines, Merthyr Tydfil, UK.
Registered as a newspaper at the Post Office.
Subscription records are maintained at Aspermont UK,
PO Box 1045, Bournehall House, Bournehall Road,
Bushey WD23 3ZQ
Aspermont UK, publisher and owner of Mining Journal (‘the publisher’) and each of its
directors, officers, employees, advisers and agents and related entities do not make
any warranty whatsoever as to the accuracy or reliability of any information,
estimates, opinions, conclusions or recommendations contained in this publication
and, to the maximum extent permitted by law, the publisher disclaims all liability and
responsibility for any direct or indirect loss or damage which may be suffered by any
person or entity through relying on anything contained in, or omitted from, this
publication whether as a result of negligence on the part of the publisher or not.
Reliance should not be placed on the contents of this magazine in making a
commercial or other decision and all persons are advised to seek independent
professional advice in this regard.
© Aspermont UK 2012 ISSN 0026-5225
Mining Journal special publication – PDAC
3

4
EXPLORATION SPECIAL
Boom in non-ferrous exploration
THE industry’s aggregate budget for
non-ferrous metals exploration surged
to an all-time high of US$18.2 billion
in 2011. Despite periods of weakness
and volatility, metals prices (the main
driver of exploration spending) have improved
significantly since bottoming in early 2009 as a result
of the economic downturn, and have remained well
above their long-term trends through 2010-11.
These are the main conclusions from the 22nd
edition of Corporate Exploration Strategies (CES),
published recently by Metals Economics Group
(MEG).
The consultancy notes that, after drastically cutting
exploration in 2009, almost all companies have
responded to rising prices by increasing their
exploration budgets over the past two years.
As a result, the industry’s aggregate exploration total
jumped 44% in 2010 and a further 50% in 2011,
more than doubling from 2009’s recent low of
US$8.4 billion to the new record last year.
MEG obtains the data used in its CES studies
through corporate co-operation. The estimate is
based on information collected from more than 2,400
companies worldwide (each budgeting at least
US$100,000). These companies together allocated
US$17.25 billion for non-ferrous exploration in 2011.
The exploration budgets covered by the study
include spending for precious and base metals,
diamonds, uranium, rare earths, potash/phosphate,
Nonferrrous
Exploration (US$ bilion)
18
15
12
9
6
3
0
Mining Journal special publication – PDAC
Fig w indxd price (Au+Base)
and many other hard-rock metals, but specifically
exclude exploration budgets for iron ore, coal,
aluminium, oil and gas, and many industrial minerals.
Rising exploration expenditure
Exploration allocations for all regions increased to
record highs in 2011, led by the largest dollar
increases in Latin America and Africa.
Latin America remained the most popular
exploration destination, attracting a quarter of global
spending in 2011, with six countries (Mexico, Chile,
Peru, Brazil, Colombia and Argentina) accounting for
the lion’s share of the region’s total. Buoyed by
strong growth in gold exploration in Colombia,
Guyana, Brazil and Mexico, the share of allocations
targeting gold in Latin America increased in 2011,
while base metals slipped to its smallest share in more
than a decade.
Canada has been the industry’s second-favourite
region, and top overall country, for the past decade,
and continued to take advantage of its large pool of
junior explorers and exploration-focused tax
incentives to attract 18% of the global total in 2011.
Three Canadian provinces (Ontario, Quebec and
British Columbia) accounted for more than 60% of
the planned Canadian non-ferrous exploration
spending. Gold remained the leading target in the
country, attracting more than 2.5 times the
base-metals budget.
Eurasian countries make up the third-largest
Nonferrous Exploration Total MEG Indexed Metals Price
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
© Metals Economics Group, 2012 Source: Corporate Explora�on Strategies
Figure 1: Estimated global non-ferrous exploration budget totals, 1993-2011 © Metals Economics Group, 2012; Source: Corporate Exploration Strategies
5.0
4.0
3.0
2.0
1.0
0.0
MEG Indexed Metals Priice
(1993=1)
Australia
13%
United States
8%
Africa
15%
Canada
Mexico 2%
18%
United States
6%
8%
© Metals Economics Group, 2012
Source: Corporate Exploration Strategies
Pacific Islands
5%
Europe/FSU/Asia
16%
Colombia 2%
Peru 4%
Chile
5%
Figure 2: Global non-ferrous exploration budgets by region, 2011
© Metals Economics Group, 2012; Source: Corporate Exploration Strategies
Latin America
25%
Canada
18%
region, led by allocations for China and Russia, and by
four other countries (Kazakhstan, Mongolia, Finland
and Turkey) that each attracted aggregate budgets of
more than US$100 million in 2011. Although gold
remained the region’s top target in 2011, base-metals
allocations increased at a faster pace owing to
rapidly-growing copper and nickel budgets for
Kazakhstan, Russia, China and Poland.
Africa saw the biggest year-on-year percentage
increase of all regions in 2011, claiming 15% of the
world total and widening its lead over fifth-place
Australia. After slipping to second place in 2010,
behind the Democratic Republic of the Congo, South
Africa regained the top spot for planned spending in
Africa in 2011. Burkina Faso rose from 12th in 2009
to third in 2011, leading the rapid rise in gold exploration
in West Africa in recent years.
Kagara Ltd drilling at its Admiral Bay zinc-lead-silver deposit
in the Kimberley region of Western Australia
2%
3%
February 2012
Argentina
Brazil
W
A

est
frica
6%
Europe 4% FSU/
3%
Mongolia
8%
Sub-Saharan
Africa
Other countries account for about 6%
February 2012
EXPLORATION SPECIAL
Russia 3%
China
Australia
16% The 6% increased efforts in 7% West Africa translated into
gold receiving more than half the African exploration
total in each of the past two years. In contrast, since
accounting for about a third of African budgets in
2004, diamond allocations dropped to an all-time low
of 6% in 2011, primarily owing to waning diamond
spending in Sub-Saharan Africa, as many companies
focus more in countries such as Russia and India.
Exploration spending in Australia kept pace with
the world average increase in 2011, maintaining the
country’s share of the total at about 13%, despite
mining reform at the national and state levels
dominating national headlines for much of the year.
Spending in Western Australia accounted for
almost half the country’s 2011 non-ferrous
exploration total, while South Australia saw the
largest year-on-year percentage increase. Gold and
base metals accounted for the bulk of Australia’s 2011
exploration total, with allocations for diamonds,
uranium, platinum-group metals, and other targets
trailing by wide margins.
Gold and copper exploration in the US kept it in
sixth place regionally, ahead of the Pacific Islands.
Nevada had the largest share of the country’s 2011
exploration total, and three states (Nevada, Arizona
and Alaska) accounted for almost two-thirds of the
country’s total. Although gold continued to attract
more than half of all spending in the US, base metals
reached its second-highest percentage share in the
past decade, based in part on increased copper
exploration in Arizona and Utah.
Among the Pacific Islands, allocations for Papua
New Guinea, Indonesia and the Philippines accounted
for the bulk of the region’s 5% of the world
exploration total, with budgets fairly evenly split
between gold and base metals.
Despite the region’s high prospectivity for gold,
copper and nickel, investors continued to be wary of
the political and social unrest, uncertainty of tenure
and periodic anti-mining violence that have plagued
the region for years. As a result, the region has not
seen many new entrants in recent years, with most
exploration conducted by larger producers in, and
around, their existing assets.
4%
5%
Pacific
Islands
13%
Mining Journal special publication – PDAC
Figure 3: Top destinations for
non-ferrous exploration, 2011
© Metals Economics Group, 2012;
Source: Corporate Exploration Strategies
“Latin
America
remained the
most popular
exploration
destination,
attracting a
quarter of
global
spending
in 2011”
5
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industry, it has decades of validation
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and production activities. Adapted to
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• Automated fracture and structural analysis from highresolution
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water.slb.com/contact
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and Engineer
In-Situ Nickel Resource Assessment
Using Advanced Geophysics
© 2012 Schlumberger, * Mark of Schlumberger

EXPLORATION SPECIAL
Rising risk tolerance
Most countries saw increased exploration investment
in 2011, and explorers demonstrated a higher
tolerance for risk despite additional concerns and
uncertainty about security, policy, taxation and tenure
in many countries. Of the 121 countries for which
MEG documented exploration spending by the
industry in 2011, those commonly perceived to be
high risk accounted for 23% of the 2011 aggregate
exploration total, up from less than 15% in 2010.
The potential reward of working in higher-risk
areas often increases the industry’s appetite for risk
during periods of increased exploration spending, but
exploration in high-risk countries, particularly
early-stage work, is usually the first to be cut when
risk levels or uncertainty increase.
Opportunity from decline in equity
markets
With junior companies, which are highly dependent
on risk capital, accounting for close to half of annual
exploration spending in recent years, the state of the
equity markets plays a key role in shaping trends and
strategies in the exploration industry.
The relatively strong market conditions last year
enabled junior explorers to raise a combined
US$7.4 billion for precious- and base-metals
exploration (see footnote to Fig 4) in the final quarter
of 2010 and the first half of 2011. Despite reports of
drill-rig shortages and assay lab backlogs in some key
exploration regions, significant drill results by the
juniors trended strongly upward for most of 2011.
Equity markets then struggled in the second half of
2011, and the pace of exploration financings fell back
to the levels of late 2009 and early 2010. Since most
of the money a junior spends on exploration in a
given year is typically raised between the fourth
quarter of the previous year and the middle of the
current year, if equity markets fail to improve in the
first half of 2012, many juniors may have trouble
raising the necessary funds to sustain or increase
exploration spending in 2012.
In contrast, intermediate and major producers with
healthy balance sheets are likely to intensify their
efforts to replace reserves by increasing their
exploration allocations in 2012. If this scenario plays
out in the coming months, the juniors’ share of
overall exploration spending in 2012 will decline.
These conditions (historically strong commodity
prices, resource-hungry miners with strong balance
sheets, and a relative shortage of available risk capital)
can create interesting opportunities for the
Amount Raised (US$ million)
1,500
1,250
1,000
750
500
250
$0
Figure 4: Significant exploration-related financings* by junior companies, 2008-11
© Metals Economics Group, 2012; Source: Industry Monitor, Exploration Activity Service
* Exploration-related financings include financings of US$2 million or more for precious or base metals (as reported in MEG’s Exploration Activity Services) by juniors, in which the
company indicated that most, or all, of the proceeds were for exploration. Although the financing data covers precious and base metals only, these target groups account for most of
the exploration spending covered by CES, and are therefore believed to be a reasonable proxy for the amount of nonferrous exploration funding available to the juniors.
exploration industry. Juniors with promising projects
at current and long-term metals prices, but with insufficient
access to equity funding to advance them in the
short term, are more open to financing, joint venture,
or acquisition discussions with larger players, or may
look to consolidate with better
financed peers, particularly when
both are working in the same
exploration camps.
In addition, if equity markets do
not improve relatively soon, majors
and intermediates looking to finance
or joint-venture with cash-strapped
juniors are likely to negotiate far
more favourable terms than they
would have in 2011.
Base Metals Financings Gold Financings Number of Significant Drill Results
JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASOND
2008 2009 2010 2011
© Metals Economics Group, 2012 Source: Industry Monitor, Explora�on Ac�vity Service
Looking forward
Despite concerns about the global
economy, and projections of
lacklustre growth for most countries, China and other
resource-hungry emerging and developing economies
are still expected to lead global GDP growth and
demand for metals over the next few years.
On the supply side, the industry still faces many of
the limitations that existed prior to the 2008
An exploration team from NGEx Resources in the field
“MEG therefore
expects a slight
decline in
spending by the
juniors, offset by
increased
spending by the
producers”
economic downturn that effectively set back the clock
on many developments. While periods of weakness
and volatility will likely continue in the near term,
most metals prices are expected to remain above
their long-term trends and comfortably above the
nominal cost of production through
2012.
Most major and intermediate
producers remain committed to
exploration to replace mined
reserves and strengthen and grow
their pipelines, particularly while
metals prices stay relatively strong.
MEG expects most producers (many
of which have much healthier
balance sheets than they did a few
years ago) to continue to invest in
organic growth, resulting in a
moderate increase in their aggregate
exploration allocation in 2012.
Exploration spending by junior companies that are
dependent on risk capital may be a different story,
however. As the pace of exploration financings
weakened in late 2011 (traditionally the busiest time
of year for exploration-related financings as
companies cash-up ahead of the forthcoming field
season) many juniors have had trouble raising the
funds needed to sustain or increase exploration
spending in 2012.
MEG notes that some juniors did raise enough
earlier in 2011 to be able to fund multi-year
programmes, and early indications are that some plan
to increase their exploration budgets in 2012, but
unless equity markets improve over the first quarter,
many will likely be forced to reduce exploration
spending this year.
MEG therefore expects a slight decline in spending
by the juniors, offset by increased spending by the
producers, resulting in a net increase of 5-15% in
exploration spending by the industry as a whole in
2012. This would be a relatively small change
compared with the 40-50% swings of the past few
years.
6 Mining Journal special publication – PDAC
February 2012
140
120
100
80
60
40
20
0
Number of Financings Completed

8
EXPLORATION SPECIAL
Where to find companies in Toronto
48
Mining Journal special publication – PDAC
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44
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30
15
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29
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54
Richmond St. E
20
23 24 25 26
31 32 33 34 35 36
39 40 41
45
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Mining Journal
Booth
Come and see us at booth
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Centre South.
March 4-7, 2012
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February 2012

Company Map ref Company Map ref
ACA Howe International 13
Aird & Berlis 49
Alexis Minerals Corp 4
Amalgamet Canada 37
AMEC plc 56
Anaconda Mining Inc 31
Andina Minerals Inc 17
Aquila Resources Inc 4
Aquiline Resources Inc 31
Aur Resources Inc 24
Aurelian Resources Inc 31
AXMIN Inc 16
Barrick Gold Corp 51
BDO Dunwoody LLP 26
Blackmont Capital Inc 49
Beach Hepburn LLP 26
Blake, Cassels & Graydon LLP 41
BMO Nesbitt Burns 32
Carpathian Gold Inc 13
Cassels Brock & Blackwell LLP 33
Central Sun Mining Ltd 20
CIBC World Markets Inc 51
Conquest Resources Ltd 47
Continental Precious Minerals Inc 12
Cormark Securities Inc 50
Crowflight Minerals Inc 4
Desert Sun Mining Corp 4
Desjardins Securities 30
Duguay & Ringler Corporate Services 11
Dumont Nickel Inc 3
Dundee Securities Corp 24
Eastmain Resources Inc 26
Equicom Group 27
Ernst & Young 47
Excellon Resources Inc 36
Fasken Martineau DuMoulin LLP 9
Blackmont Capital inc 49
FNX Mining Co Inc 30
Fraser Milner Casgrain LLP 40
Gabriel Resources Ltd 23
GlobeStar Mining Corp 38
GMPSecurities LLP 39
Goldcorp Inc 15
Goldcrest Resources Ltd 18
Griffiths McBurney & Partners 39
Haywood Securities Inc 49
Heenan Blaikie LLP 9
High River Gold Mines Ltd 42
Iamgold Corp 7
Inmet Mining Corp 18
Intrepid Minerals Corp 21
Jaguar Nickel Inc 16
February 2012
Kinross Gold Corp 53
KPMG LLP 9
Lang Michener LLP 49
Legend Gold Corp 26
LionOre Mining International 27
Lydian International Ltd 55
MacDonald Mines Exploration Ltd 22
Marsh Canada Ltd 51
McCarthy Tétrault 46
McMillan Binch Mendelsohn 49
Metallica Resources Inc 26
Metro Convention Centre 48
Micon International Ltd 6
Morgan Stanley Canada Ltd 49
Moydow Mines International Inc 27
MPH Consulting Ltd 8
Mustang Minerals Corp 4
National Bank Financial 31
Norton Rose (and Macleod Dixon LLP) 50
Olympus Pacific Minerals Inc 35
Ontario Securities Commission 2
Paterson, Grant & Watson Ltd 21
Patricia Mining Corp 34
PricewaterhouseCoopers 40
Primero Mining Corp 16
Queenston Mining Inc 8
Raymond James Ltd 33
RBC Capital Markets 50
Rio Narcea Gold Mines Ltd 14
Scotia Capital Markets Inc 33
Scott Wilson Group 44
SouthernEra Diamonds Inc 47
Sparton Resources Inc 44
SRK Consulting 25
Stikeman Elliot LLP 41
Strathcona Mineral Services Ltd 27
Stroud Resources Ltd 18
Tahera Diamond Corp 40
Temex Resources Corp 22
Tiberon Minerals Ltd 19
Toronto Stock Exchange 31
Tribute Minerals Inc 42
TSX Venture Exchange 31
Twin Mining Corp 21
UBS Securities Canada 51
Ursa Major Minerals Inc 34
Vale Inco 50
Valencia Ventures Inc 4
Verena Minerals Corporation 34
Wardrop Engineering 18
Watts, Griffis and McOuat Ltd 34
Zaruma Resources Inc 27
EXPLORATION SPECIAL
BUILDING ADDRESSES
1 480 University Ave
2 20 Queen St W
3 230 Richmond St W
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5 80 Richmond St W
6 390 Bay St
7 401 Bay St (Simpson Tower)
8 133 Richmond St W
9 333 Bay St
10 85 Richmond St W
11 56 Temperance St
12 360 Bay St
13 365 Bay St
14 181 University Ave (Guardian Tower)
15 130 Adelaide St W (Laurentian Bank)
16 120 Adelaide St W (Richmond-Adelaide)
17 56 Temperance St
18 330 Bay St
19 100 Yonge St
20 6 Adelaide St E
21 155 University Ave
22 141 Adelaide St W
23 110 Yonge St
24 1 Adelaide St E (One Financial Centre)
25 25 Adelaide St E
26 36 Toronto St
27 20 Toronto St
28 55 Adelaide St E
29 260 Bay St
30 145 King St W
31 130 King St W (Exchange Tower)
32 100 King St W(1st Canadian Place)
33 40 King St W (Scotia Plaza)
34 8 King St E
35 10 Kings St E
36 20 Victoria St
37 60 Yonge St
38 18 King St E
39 145 King St
40 77 King St W (Royal Trust Tower)
41 199 Bay St W (Commerce Court)
42 67 Yonge St
43 70 University Ave
44 55 University Ave
45 79 Wellington St W
46 66 Wellington St W (TD Bank Tower)
47 220-222 Bay St
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49 181 Bay St (Bay Wellington Tower)
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Mining Journal special publication – PDAC
9

10
EXPLORATION SPECIAL
Core exploration decisions
Drilling is a crucial part of the exploration process; Mining
Magazine, a sister publication of Mining Journal, investigates
the different methods and the key rig-selection criteria
THERE are a variety of drilling methods
used to obtain samples for analysis in
mineral exploration. These methods
include diamond drilling to recover
core, reverse circulation (RC), rotary
air blast (RAB), air blast and sonic drilling. There are
advantages and disadvantages to all these methods,
depending on the location and on the results that
need to be achieved. Indeed, no single drilling system,
Mining Journal special publication – PDAC
Boart Longyear’s
LF230
or sampling technique, works best for all drilling
conditions.
When selecting a drilling method to collect
samples, it is important to consider the following
parameters:
• Borehole size and depth;
• The type and quality of the sample that needs to be
recovered;
• Whether the site is brownfield or greenfield; and
• Leases and budgets.
The product manager for drill rigs at Fordia,
Eric Paquet, told Mining Magazine
recently: “While diamond core
drilling is sometimes more costly
than other techniques, it is the
only method that can collect
consistent, high-quality core
samples along the entire length
of a borehole.” This allows for
accurate interpretation of the
structural geology when logging,
and a high degree of clarity in
assays and other methods of lab
analysis.
While RC drilling offers rapid
execution, and similar or less
expensive operating costs, the samples collected via
this method can be less precise.
RC drilling is ideal for quickly extracting core
chips at shallow target depths, whereas diamond
coring is more reliable when precise samples and
structural information are required. Rock fragments
obtained using RC drilling can also be misinterpreted,
as they often get mixed up with chips from different
depths during drilling. The sample can thus be
“For exploration
projects in remote or
environ mentally
sensitive locations,
the use of diamond
rigs is also preferable
owing to their
portable nature”
Ingetrol’s Explorer Jr 36D2 rig
contaminated and may distort analysis results.
Wayne Slight, global market and sales support
manager for exploration drills at Sandvik, explains:
“RAB and RC drilling methods retrieve an accurate,
representative chip sample of the rock, and are
appropriate drilling methods in first-pass and infill
drilling, intermediate, delineate orebody and
grade-control programmes, but will offer no
information on the structural or physical properties
of the geology.
“Diamond core drilling is better suited to
intermediate- and late-stage exploration, reservedefinition
and structural control
drilling programmes. Core
drilling will retrieve a highly
accurate, solid, cylindrical sample
from the rock, down to depths
of 4,000m.”
A key advantage of diamond
core drilling is the one-pass
technique. It gathers the highest
quantity of information in one
bore, from top to bottom of the
borehole. Justin Warren, senior
global product manager, drilling
equipment at Boart Longyear,
adds: “Another advantage of the
diamond drilling method over RC or RAB is that it
allows 3-D assessment of the lateral extent and depth
of an orebody.”
For exploration projects in remote or environmentally
sensitive locations, the use of diamond rigs is also
preferable owing to their portable nature: many are
constructed in lightweight modules to allow easy
transport and fast assembly. Diamond core is also the
preferred sample method for JORC compliance, and
as known mineral resources dwindle, exploration will
move increasingly towards portable, yet deep-capacity
rigs, to search for new reserves.
Rig types
Although many different styles of diamond coring
drills exist, the components are essentially the same.
Mr Slight explains: “The two most commonly used
mechanisms are top-drive rotation units and hollow
spindle rotation units. A top-drive rotation unit is
usually a component of a multi-purpose rig which
easily can be adapted for core, DTH (down-the-hole)
and RC drilling.
“A hollow spindle rotation unit is a component of
a dedicated core drill, which is available with a drill
mast for longer pulls or, as a smaller, modular version
with a feed frame that can be used for both surface
and underground applications. The advantages of using
this type of rotation unit are that they can operate
with a shorter mast and feed cylinder. This is because
the unit can drill down, stop and move up to the top
of the rod and continue drilling again, resulting in an
average 3-4m stroke instead of the 6m stroke
required for most top-drive units.
February 2012

“The hollow spindle also makes use of chuck jaws
to grip the outside of the drill rods, which reduces
rod wear, as less torque and feed force is applied to
the drill string. This type of rotation unit can also be
used to assist with the making-up and breaking-out of
the rod joint. Drills using hollow spindle rotation units
tend to have a much smaller profile, which is why the
majority of underground drill rigs are this style.”
As a leading global manufacturer of multipurpose
drills, Sandvik has a strong bond to this type of rig.
However, the company has reported that its
best-selling rig for surface exploration applications is
the DE710 diamond core rig.
This is a compact model
designed for tough
conditions. For Sandvik, the
DE130 and DE140 models
are popular for underground
use as their compact,
modular, design enables them
to move in tight spaces with
minimum disturbance.
Purchasing criteria
Buying a new drill rig
represents a significant
capital investment, even for very large companies. The
selection will ultimately affect the productivity and
profitability of its drilling projects, and is entirely
dependent on the nature of the drilling to be
undertaken.
February 2012
“The drilling capacity of a
rig, and how it compares
with the customer’s
requirements, is probably
the most vital
consideration when
making a purchase”
The Ingetrol Explorer Plus MD4
Dawn Overby, vice president of sales and marketing
at Ingetrol, highlights: “The first thing that needs to be
defined is how deep the drill needs to penetrate and
the diameter core size required by the geologist. This
information will determine the size of the rig.”
The drilling capacity of a rig, and how it compares
with the customer’s requirements, is probably the
most vital consideration when making a purchase;
there is little point in spending a large amount of
money buying an extremely powerful machine if the
company only requires a
drilling capacity of a few
hundred metres. On the
other hand, no drilling
contractor wants to turn
down a contract because its
equipment does not meet
the technical requirements.
Mr Warren says: “Depth
capacity is one of the most
important criteria in
selection of most diamond
drills, as the rig needs to be
capable of reaching the
depths required of the drilling programme”.
Mr Warren adds: “There are several parameters
affecting the depth capacity of the drill, including
pullback force, the holding force of chuck and
footclamp, the hoist capacity of the winch and the
EXPLORATION SPECIAL
torque and RPM generated by the rotation unit.
Different models such as Boart Longyear’s LF70, LF90
and LF230 provide different depth capacities to meet
these requirements.”
It is vital to consider the size of the work area in
relation to the size of a drill before purchase. Mr
Slight says: “Trying to mobilise a large rig in a tight
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Mining Journal special publication – PDAC
11

Greenland Day
Presented by
Bureau of Minerals and Petroleum (BMP) &
Geological Survey of Denmark and Greenland
Monday, March 5 th 2012
Location: Room 206 DC
Address: MetroToronto Convention Centre, North Building
Program
9.00–9.15 Seating and welcome by Director of the Bureau of Minerals and Petroleum, Greenland, Jørn Skov Nielsen.
9.15–9.30 An update of Greenland mineral exploration and new initiatives by Jørn Skov Nielsen, BMP.
9.30–9.45 Archaean geology and evolution in the North Atlantic Craton of South-East Greenland by Jochen Kolb, GEUS
9.45–10.00 Mineral systems in the North Atlantic Craton of South-East Greenland by Bo Møller Steensgaard, GEUS
10.00–10.15 The zinc potential of Greenland. Recent assessment data, and ongoing evaluation and research by Per Kalvig, GEUS
10.15–10.30 Coffee break.
10.30–10.45 Review of geophysical data and an outlook on the 2012 aeromagnetic project by Thorkild M. Rasmussen, GEUS.
10.45–11.00 Oxygen isotopes and geochemical characteristics of corundum from Greenland. Constraints on their origin by P. Kalvig, GEUS
11.00–11.15 Critical minerals and their distribution in Greenland by Henrik Stendal, BMP
11.15–11.30 Greenland Mineral Resources Portal - a new interactive web-facility developed by GEUS and BMP by Leif Thorning, GEUS
11.30–11.45 New possibilities for travelling between Greenland and Canada by Hans Peter Hansen & Christian Berg, Air Greenland
11.45–12.00 Concluding remarks by Jørn Skov Nielsen, BMP.
All are welcome
Greenland has experienced a very positive development of mineral licence
interests during the last fi ve years, where the numbers of mineral licences
have at least tripled. A large number of the companies involved in the
Greenland exploration and exploitation activities are domiciled in North
America, Australia and Europe.
Bureau of Minerals and Petroleum (BMP) and the Geological Survey of
Denmark and Greenland (GEUS) will present the latest results from
exploration in Greenland at a ‘Greenland Day’ during the PDAC in
Toronto. The exploration highlights comprise new geological information
from South East Greenland, base metals, and critical minerals such as
rare earth minerals (REE), niobium (Nb) and tantalum (Ta).
The newest data from the 2011 fi eld campaign from SE Greenland will
be released at the session. The geology has been reinterpreted based on
new data gathered during the 2009 – 2011 fi eld seasons. New initiatives
concerning zinc in North Greenland, a new Greenland web portal and
fi ngerprinting results of rubies will also be highlighted.
About BMP
The Bureau of Minerals and
Petroleum is responsible for
the whole chain of tasks linked
to the exploration to production
of minerals and petroleum.
The task is to ensure the legal
and political framework for
reliable, environmentally
sound and clean exploitation
of energy and minerals
resources in Greenland.

spot can create severe problems, and getting the rig
into the correct position would be very difficult. A rig
that is too small for the programme could mean
having to move 
a larger rig onto site at a later stage.
With the sumps and drill pad established, this can
cause long down times and delays.”
Ms Overby adds: “Ingetrol continues to focus
providing drill rig solutions for deeper holes while
maintaining portability. Ingetrol relaunched its
Explorer Plus MD4 drill rig in February, increasing its
drilling capacity to 900m in NWL and 600m in HWL,
while maintaining the maximum modular weight at
only 245kg. The size of the rig and operating site will
also determine access to water carriers, and can
create issues with rod handling and rig maintenance.”
Mr Paquet adds: “Because the current trend is to
drill increasingly deep holes, with increasingly large
diameters, more and more companies are looking for
very high-capacity drills with a rotating head that can
accommodate diameters up to PWL.”
It is also important to define whether the rig will
be used for surface or underground drilling. Some
drills can be adapted to operate in either environment,
and many manufacturers
offer a conversion kit for their
rigs.
Mr Paquet comments: “Fordia
offers an optional conversion kit
for all of the surface models in
its new Eider line of drills. So a
company can choose to invest
in a conversion kit rather than
buy a whole new underground
drill. We have found that this
flexibility is greatly appreciated
particularly by small- to
medium-size drilling companies.”
The Eider range has recently
been updated with new features such as two hydraulic
pumps for a greater and independent hydraulic
pressure control, and a number of other options
February 2012
The Golden Bear rig from
Fordia which offers a range
of customised options,
including motors adapted
for high altitudes
“If a rig is operated in
accordance with the
manu facturers’
guidelines, the major
components should
last at least a year
before an overhaul
would be required”
allow the drills to be customised to meet customers’
needs.
Ease of transportation is another key concern for
customers. This is particularly important when operating
in remote or high-altitude areas. The weight of
each piece of equipment has a direct impact on the
cost of transport, which, in such cases, is often
undertaken exclusively by helicopter.
Ms Overby supports this: “It
is important to consider how
the drill will be transported.
How remote is the location?
What access routes and
infrastructure are available to
reach the site? This will
determine the level of mobility
that the rig requires and how it
can be moved to the site. Then
you can decide if the drill will
need to be man-portable,
heliportable, mounted on skids,
a truck or crawler tracks.
“If the drill will be working at
high altitude, that is over 3,000m above sea level, this
must be taken into consideration when choosing a
diamond core drill rig, as the motor’s maximum
EXPLORATION SPECIAL
potential will be reduced by as much as 30% in high
altitude. To compensate for the high altitude, it is
recommendable to use a turbo-diesel motor, as well
as increase the horsepower of the motor.”
Mr Warren adds: “Having adequate power to drill
the hole is necessary to compensate for geology of
the rock during drilling. A high torque ratio to the
revs/min is directly proportional to the power of the
drill. A higher torque is needed for efficient drilling in
fractured ground conditions, while higher revs/min is
needed to drill the hole faster in competent ground
conditions.”
Boart Longyear’s LF Series surface drill rigs, says Mr
Warren, “have a high-torque rotary head compared
with the underground LM series drills, which helps
the driller compensate for the broken ground
conditions which can be encountered in surface
drilling applications.”
Companies wishing to add a drill to their fleet
should also consider all of the configurations and
optional components available on purchase. Many
manufacturers can customise rigs to meet specific
requirements, while some even have a dedicated
technical team offering advice when choosing optional
extras.
For example, Fordia offers motors adapted for high
altitudes; shacks and heating systems for drills
operating in extremely cold conditions; additional
safety guards to meet varying safety standards; and
can repaint rigs in clients’ corporate colours. Boart
Longyear offers a similar service. The RC rod handlers
on its LX16 and LC36 drills eliminate the process of
manually adding and removing the rods from the drill,
and incorporate safety features such as interlocked
rotation barriers and synchronised chucks.
Maintenance and repair
Maintaining and repairing a drill can be highly complex,
especially when operating in remote areas. To ensure
the success and profitability of the drill programme,
and to enable its completion within the allotted time,
The LF90 is one of
a range of Boart
Longyear rigs that
provides different depth
capacities. Inset: the
Fordia Eider 1100
Mining Journal special publication – PDAC
13

14
EXPLORATION SPECIAL
A Hydracore drill
rig in operation in
Guatemala
Mining Journal special publication – PDAC
• Tailings Dams
the onsite team must ensure that they have access to
a full inventory of spare parts and repair tools.
Wear parts must be checked regularly and the
company should promote equipment use that
respects the clauses stated in the rig’s manufacturer
warranty. This will help to optimise the equipment’s
functionalities while also ensuring normal wear.
Mr Slight says: “A strong understanding of the drill
that you are working with is
paramount. With this understanding,
and training and support from
the OEM, it is possible to
implement a good maintenance
programme, have the spares on
hand should a fault occur, and keep
down time to a minimum.”
Mr Paquet says: “Some drills, like
Fordia’s Golden Bear 1 400 S, have
a simple mechanical design that
allows for the replacement of
important parts without the need
for a technician or hydraulic
engineer.”
Nigel Spaxman, manager of Hydracore, adds:
“Choosing a good-quality machine that utilises a
simple and straightforward design will help to avoid
unnecessary maintenance problems. If a rig is
operated in accordance with the manufacturers’
guidelines, the major components should last at least
a year before an overhaul would be required.
“Hydraulic systems on drill rigs are often much
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“Taking time to
check the rig over
before and after a
shift can
significantly
improve the
chances that it will
perform optimally”
more complicated than is necessary. A load-sensing
hydraulic system is not always required on a diamond
drill, but most machines have them. Pumps and valves
for these systems are expensive to replace and are
often prone to failure. Staying away from electronically-controlled
diesel engines is a good way to avoid
problems too.”
As with any mechanical issues, prevention is better
than cure. Taking time to check the
rig over before and after a shift can
significantly improve the chances
that it will perform optimally. Ms
Overby explains: “During this time,
the driller should thoroughly
review the rig, looking for worn
parts or anything out of the
ordinary. The rig should also be
cleaned, well-oiled and should
receive regular services at planned
intervals.
“It is important for the driller
to feel responsible for the rig;
we have seen too many occasions
when the responsibility of rig maintenance is passed
from person to person and no-one takes ownership
of the rig. It often leads to problems.”
Avoiding common mistakes
Rushing to buy a rig because a tender has been won,
or choosing a model based on a quick delivery time,
rather than for the purpose of the project are the
Visit us at PDAC
Booth 1145!
February 2012

most common mistakes companies make when buying
diamond core rigs (they are also the most expensive).
Ingetrol believes that poor identification of project
requirements when choosing a drill rig can also result
in an incompatible purchase. “Many times, the person
choosing the drill rig is not the person who will be
using it, or even someone who will be on site when
drilling is taking place,” says Ms Overby.
“And they do not understand the requirements of
the drilling programme thoroughly enough. The worst
thing that could happen is that the drill rig gets to the
site and it is unusable, or no-one wants to take
responsibility for the rig, because the correct
requirements were not given at the start.”
Under-estimating the expense and slower drilling
rates associated with diamond core drilling in
comparison to RC methods can also cause a short
project to become long and expensive.
It is important to assess the overall cost of running
a drill rig as well as
February 2012
Mr Slight adds: “Site preparation and water supply
are often overlooked as well. This causes delays in
getting equipment to the site to support the rig. The
drill is just one piece of machinery for the driller to
keep in mind. There is a
purchasing it. A spokesperson
at Energold says:
“Sometimes mining
companies decide to
purchase their own rigs
because they assume it will
be cheaper than hiring a
total package, and the
“Under-estimating the package must support the
expense and slower drilling project. In short, know the
programme, know the rig
rates… can cause a short you choose, plan the drill,
and drill to the plan.”
project to become long” Mr Spaxman says:
contractor. However, they
“I think that a bit of
later discover that it is not easy to operate, maintain thorough research on the part of the purchaser, for
and provide logistics for the machine, and it can often example, by asking other owners of the machines that
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EXPLORATION SPECIAL
Drilling operations with Hydracore
speaking to different manufacturers on the options
that they offer, would help to prevent a lot of
problems. This will also give a better idea of the actual
performance of each model.”
Mr Warren adds: “Arguably, the most important
factor is to ensure that the drill is maintained in
accordance with the schedule laid out in the
manufacturer’s operation and maintenance schedule.
If the servicing steps laid out in this document are
followed, the drill should give many years of reliable
service and maximise drill uptime. Also ensuring daily
prestart checks is an important safeguard in
identifying potential problems before they cause drill
down time.”
Mining Journal special publication – PDAC
15

16
EXPLORATION SPECIAL
Leading the search for minerals
Lydian International – Amulsar
Early in 2011, Lydian received an independent resource estimate delineating
2.5Moz of gold within indicated and inferred resources at its greenfields
Amulsar epithermal gold project in Armenia.
A scoping study forecast average gold production during the first three
years of 123,000oz/y, rising to 256,000oz/y from year four until year seven,
averaging 221,000oz/y from years four to nine. The discovery won Mining
Journal’s Outstanding Achievement award for exploration last year (presented
at the Mines & Money event in London).
Detour Gold – Detour Lake
Detour Gold Corp recently increased reserves at its Detour Lake gold
project in Ontario, defining 15.6Moz of gold, thereby increasing the mine
forecast life to 22 years, at a rate of 55,000-61,000t/d. The update included
a 13% increase in global measured and indicated mineral resources from
20.5 to 23.3Moz.
The project’s feasibility study in 2010 designed average annual gold
production of 649,000oz, peaking at more than 800,000oz. The company’s
chief executive, Gerald Panneton, won this year’s Bill Dennis award from the
PDAC.
Mining Journal special publication – PDAC
New Gold Inc – Blackwater
New Gold Inc
recently
consolidated
ownership of
the Blackwater
gold-silver
project in British
Columbia by
acquiring its
joint-venture
partner in a
portion of the
property,
thereby gaining
100% interest in
the deposit
estimated at
end-2011 to
contain 5.4Moz
of gold in
indicated
resources, and a
further 1.2Moz
in inferred.
Highlands Pacifi c – Frieda River
Highlands Pacific Ltd recently received an independent estimate for two
deposits at the Frieda River porphyry district in Papua New Guinea, raising
contained metals within the district to 12.9Mt copper and 20Moz gold.
Highlands commissioned consultant Hellman & Schofield to prepare the
estimate for the Ekwai and Koki deposits, located immediately adjacent to
the much larger Horse-Ivaal-Trukai (HIT) porphyry system, which is the
subject of an ongoing feasibility study for the Frieda River joint venture,
operated by Highlands’ partner Xstrata plc.
The project’s pre-feasibility study, delivered in October 2010, outlined an
open-pit mining operation based on the HIT system. Average metals output
was forecast at 190,000t/y copper and 280,000oz/y of gold over 20 years.
February 2012

Randgold Resources – Kibali
The first phase of development of the joint-venture Kibali gold project in the
Democratic Republic of the Congo has begun, with operator and 45%-owner
Randgold Resources Ltd mobilising construction crew.
The project, 45%-owned by AngloGold Ashanti Ltd, and 10% by the
Democratic Republic of the Congo parastatal Sokimo, was revised last year
from an original 4Mt/y plan to a target 6Mt/y throughput. Probable reserves
were estimated at the end of 2010 at 74.32Mt at an average grade of 4.21g/t
Au, for contained gold of just over 10Moz.
February 2012
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Goldcorp – Cerro Negro
EXPLORATION SPECIAL
Goldcorp Inc has nearly doubled reserves and resources at the Cerro Negro
gold-silver project in Santa Cruz, Argentina, since acquiring previous owner
Andean Resources in 2010.
The company has reconfigured the scope of the project, doubling the
proposed throughput rate to 4,000t/d, enough to support 550,000oz/y of
gold production during the first five years.
Partnerships with
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Mining Journal special publication – PDAC
17

18
EXPLORATION SPECIAL
Rainy River
A preliminary economic assessment for Rainy River Resources Ltd’s
eponymous gold project in Ontario has indicated potential for a combined
open-pit and underground operation producing 320,000oz/y.
The study was based on a June 2011 estimate defining 4.4Moz in the
measured and indicated resource category, and approximately 2.3Moz
in the inferred resource category.
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Mining Journal special publication – PDAC
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Lumina Copper – Taca Taca
Lumina Copper Corp continues to intersect long intersections of coppergold-molybdenum
mineralisation at its Taca Taca porphyry deposit in
Argentina.
The ongoing drilling programme is designed to expand the resource in
several directions, as well as fill in between previous holes to convert inferred
resources into the higher-confidence indicated category. Latest intersections
included the longest interval of mineralisation drilled at the project, totalling
813m at an average 0.60% Cu equivalent, and was 300m from previous drilling
that defined the boundary of the 2011 resource.
Indicated resources were estimated at 516Mt at an average grade of 0.58%
Cu, 0.12g/t Au and 0.018% Mo, with inferred resources estimated at 880Mt at
0.43% Cu, 0.08g/t Au and 0.015% Mo.
Mining Journal • Stand 709 • PDAC 2012 • March 4 – 7 • Metro Convention Centre South, Toronto
www.mining-journal.com
February 2012

African Barrick – Tusker
Exploration amounting to US$40 million, including 166,000m of drilling, has
been used to quadruple African Barrick Gold plc’s estimate for Tusker gold
deposit, part of its Nyanzaga gold project in Tanzania.
African Barrick calculated that Tusker contained 3.5Moz of gold within
indicated resources captured by an open-pit outline designed using a gold
price of US$1,400/oz, with an additional 0.6Moz in the inferred category.
The previous estimate for the deposit contained about 313,000oz of gold
within indicated, and 650,000oz in inferred categories.
February 2012
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The company is
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Western Australia
to the east of
the Laverton Belt.
It has identified
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gold-mineralised
zones within
its 5,000km 2
tenement area,
and a recent
scoping study on
one has indicated
economic
potential. The
project has won
exploration
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Mines & Money
Australia.
EXPLORATION SPECIAL
Gold Road Resources – Yamarna
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Mining Journal special publication – PDAC
19

Eastern Mediterranean excellence
There have been very few positives to be
taken from the global financial crisis but
EMED Mining Public Ltd is benefiting from
one of them. With investment scarce, and
job opportunities dwindling during the past
three years, the Cyprus-based company has witnessed
a significant improvement in European encouragement
of mining. This stakeholder support has extended from
governments and the regulatory authorities through to
public sentiment.
EMED’s managing director, Harry Anagnostaras-
Adams, admitted that the GFC, together with last year’s
‘Arab Spring’ uprising and the current Euro crisis, have
had a “high impact” on the company’s activities but that
this has been “mostly for the better”.
Mr Adams told Mining Journal that, over the past few
decades, Europe had “fallen out of love with mining”,
and he sees one of his roles as being to help overcome
an inherent mistrust of the sector.
Fortunately, there has been a recent rediscovery of
the importance of natural resources. With well-paid
employment at a premium, people are now much more
amenable towards the industry.
Regional role
EMED, which is listed on AIM in London (code: EMED)
and on the Toronto Stock Exchange (code: EMD), has
interests that span across Europe and the Middle East.
The company’s mission is to be “at the forefront of
mining in this part of the world”, and Mr Adams said its
principal activity is “to explore responsibly for, and
develop, natural resources, with a particular focus on
copper and gold”.
These assets include many past centres of mining
but also under-explored areas hosting many types of
mineralisation, including volcanogenic-hosted massive
sulphide copper-gold deposits, epithermal gold and
porphyry copper-gold.
Despite a clutch of properties, EMED is focused on
two key projects (in Spain and Slovakia) that Mr Adams
believes hold “the greatest potential to add major
value”. In Spain, EMED now owns 100% of the historic
Rio Tinto copper mine, and associated processing
infrastructure. This, said Mr Adams, is “an exceptional
opportunity for EMED to start producing copper with a
relatively fast start-up programme and low up-front
capital costs”.
In central Slovakia, EMED has 100% ownership of
the Detva gold project, which includes the “very
encouraging” Biely Vrch gold discovery. A scoping
study earmarked a 60,000oz/y gold mine, and EMED is
also actively exploring within the large surrounding
licence area.
In addition, EMED owns 18% of AIM-listed KEFI
Minerals plc, which is primarily exploring for gold and
copper in the Kingdom of Saudi Arabia and in Turkey.
Company profile
Strategic targets
Formed in 2005 by Australian mining-industry
specialists, EMED has a corporate base in Cyprus (the
site of its first project), which is geographically central
to the corporate area of interest in Europe and the
Middle East. Other than a small corporate governance,
compliance and treasury team in Cyprus, operational
personnel are all based at the project sites.
The group’s interests focus on the Mesozoic to
Tertiary age tectonic belt that extends for over 3,000km.
EMED’s strategy, said Mr Adams, is “rapidly to evaluate
exploration opportunities in several jurisdictions
throughout this quality mineral belt with a relatively
high rate of project turnover”.
The company has a strong commitment to
responsible development of metal production
operations in Europe. Indeed the company (whose
name is actually derived from the original moniker of
Eastern Mediterranean Resources) now promotes its
acronym as the descriptive Excellence in Mining,
Exploration and Development.
To this end, the team includes specialists from the
Americas, Cyprus, Slovakia and Spain, with most of the
personnel based in Spain. Group technical services and
operational headquarters is at Rio Tinto mine located
adjacent to the town Minas de Riotinto (literally “the
mines of Riotinto”) in Andalucia.
EMED’s regional strategy has not changed since the
company listed on AIM in May 2005:
• Focus on demonstrably well-endowed areas, and
apply modern exploration techniques;
• Use relationships in the region to provide a high level
of technical, political and other expertise;
• Demonstrate a commitment to the region by being
headquartered in Cyprus, and establishing offices near
the geographic centre of each prospect; and
• Integrate the practical experience gained in the
world’s leading metal-producing countries with local
expertise in each country where EMED is active.
Mr Adams notes that this strategy has been
successfully implemented, with the company now
enjoying first-mover advantage in the region. “We have
established”, he stressed, “a position of prominence for
the industry in Spain, Slovakia and Cyprus”.
Spanish developments
In May 2007, EMED was granted an option to acquire
the Rio Tinto copper mine (Proyecto de Rio Tinto),
which was previously operated by RTZ (now Rio Tinto) an
subsequently by a workers’ co-operative. The main assets
are the mine and plant site adjacent to the town of Rio
Tinto, 65km northwest of Seville in Andalucia. The mine
was placed on care and maintenance in 2000 due to
then-prevailing low copper prices (of below US$1.00/lb).
The asset is held through wholly-owned EMED
Tartessus SL, which has undertaken extensive studies
on the mine (independently reviewed by AMC
Consultants and Behre Dolbear International).
Measured and indicated mineral resources total
203.1Mt at 0.46% Cu (0.93Mt of contained copper), with

NEW SKILLS ON BOARD
EMED recently announced three new non-executive directors; Jose Sierra Lopez, Robert Francis and Jasper
Bertisen. Based in Madrid, Dr Sierra (73) brings extensive mining experience in the business and government
sectors, formerly as Spain’s national director general of mines and construction industries, and as the EU’s
director for fossil fuels.
Based in Canada, Mr Francis (66) is a retired senior partner of the Toronto office of Deloitte & Touche LLP,
having enjoyed an extensive career in public accounting in Canada. He provided a complete range of services to
the metals/mining sector and advised extensively on corporate regulatory compliance matters.
Based in the US, Mr Bertisen (31), who replaced Ross Bhappu on February 8, is a principal with RCF
Management LLC, the manager of Resource Capital Funds. The latter owns 167.0 million EMED shares (see box).
proved and probable ore reserves of 123.0Mt at 0.49%
Cu (0.61Mt contained copper). Both calculated at a
cut-off grade of 0.20% Cu.
Key anticipated production parameters for the Rio
Tinto mine are production of approximately 37,000t/y
copper-in-concentrate, based on processing 9.0Mt/y of
ore. The average waste-to-ore ratio, for the life of mine,
is around 1.1, with a total cost of US$1.57/lb (including
all operating and all capital costs).
Employment is expected to be 400-450 employees
and contractors at full production. There is a potential
to extend the 14-year mine life through conversion of
more resources to reserves.
Discussions continue with the regulatory authorities
in Andalucia on the various permits required to start
project works at the Rio Tinto copper mine by the end
of 2012 (and for production to start in 2013).
The regional Spanish government (Junta de
Andalucia) has made public policy statements that
clearly confirm support for EMED’s plans to restart the
Rio Tinto mine as soon as possible. Indeed, the
government has stated that it wants the project to be
triggered in the third quarter this year (elections are
due on March 25, and the opposition has called for an
even earlier target).
At stake are the 1,200 jobs that the mine construction
would bring by the end of this year if the project
gets an early go-ahead. This is particularly important
because of the 50% local unemployment.
Mr Adams noted that the government has taken
initial steps to demonstrate its commitment to
administer permitting and access to third-party lands,
whilst ensuring proper handling of third parties’ rights
and full regulatory compliance. He added that the
judiciary has “dismissed all legal challenges filed by the
former project operator and adjoining landowners
against the company’s plans”.
Mr Adams described the outstanding challenges as
“frivolous”, and he expects them to be dismissed by the
judiciary, and anyway “have no bearing on the project”.
EMED recently reached an agreement with Yanggu
Xiangguang Copper Co (XGC) for funding of US$30
million (half in the form of share capital and half in the
form of a standby debt facility). In exchange, XGC
gained a 10% equity stake in EMED (on a fully-diluted
basis) and limited off-take rights over the copper
production from the Rio Tinto mine.
Under the agreement, XGC is to provide US$15
million by way of a subscription for new ordinary shares
in the company (at £0.09/share) and will provide, or
arrange, a US$15 million subordinated debt facility. In
exchange, EMED’s subsidiary, EMED Marketing Ltd, has
granted XGC off-take rights over 25% of current
reported copper reserves, at market prices.
Meanwhile, EMED is in “advanced discussions” with
potential project financiers with a view to finalising a
mandate in respect of the provision of project debt of
US$175 million for the Rio Tinto mine.
Slovak potential
EMED’s gold exploration in eastern Europe is focussed
on the company’s 100%-owned Detva and Stiavnica-
Hodrusa licences in central Slovakia.
The Detva licence area is 25km east of the Stiavnica-
Hodrusa district. The geology consists of a calderagraben
complex in the centre of a large stratovolcano.
Widespread propylitic and localised advanced argillic
alteration in the application area indicate substantial
hydrothermal activity. This setting is considered to be a
classic geological setting for the formation of large
porphyry and epithermal gold orebodies.
The Biely Vrch gold deposit within the Detva licence
was discovered by EMED in October 2006, and drilling
was undertaken during 2007 and 2008.
By the end of 2008, EMED had completed a diamond
drilling programme of 34 holes on a 100m by 100m grid
pattern. The gold mineralisation is contained in a
broadly pipe-shaped quartz-veinlet stockwork zone
associated with an andesitic porphyry intrusion.
The mineral resource measures some 350m
north-south and 300m east-west, and extends from
surface to a depth of 250m. Initial metallurgical
testwork of Biely Vrch drill core samples indicates the
gold mineralisation is not metallurgically complex.
The work culminated in an initial JORC-standard
mineral resource comprised of 17.7Mt at 0.81g/t
(containing 461,000oz of gold) in the indicated
category, and 24.0Mt at 0.77g/t (containing 596,000oz)
in the inferred category.
This style of deposit typically occurs in clusters, and
so exploration has continued on many other porphry
gold and copper-gold prospects within the company’s
large licence areas.
Further drilling at the Biely Vrch site itself will be
undertaken after the necessary open-pit mining
licences are issued. These are expected to be granted in
the second quarter after political elections (due, like
those in Spain, in March), and Mr Adams described the
approval as “not a problem”.
It is currently envisaged that the project will produce
some 60,000oz/y at an average cash cost of around
US$530/oz, but EMED intends to optimise the pit design
further. At the moment, the other key parameters from
the Biely Vrch scoping study are for a life of over ten
years, with overall gold recovery of 81%.
The company’s Stiavnica-Hodrusa licence area covers
a substantial portion of what is a world-class mineral
district. Historical production has been sourced from
narrow, high-grade epithermal veins but EMED will be
www.emed-mining.com
LOAN CONVERTED
Resource Capital Funds and RMB Australia Holdings
have exercised their right to convert the amounts
owed to them under a loan agreement in March
2009. Accordingly, the outstanding loan of
US$8.5 million has been satisfied in full by the issue
of shares at 4.13p/share. RCF now owns 167.0 million
shares and RMB 67.5 million shares (18% and
7% of EMED’s fully diluted equity, respectively).
KEFI INVESTMENT
AIM-listed KEFI Minerals plc, which is 18%-owned
by EMED, owns carefully selected licence areas in
Saudi Arabia and Turkey, as well as an extensive
regional exploration database.
In Turkey, KEFI has a portfolio of exploration
projects at various stages of evaluation. In Saudi
Arabia, KEFI has a joint venture with leading Saudi
construction and investment group Abdul Rahman
Saad Al-Rashid & Sons Co.
the first company to test systematically for large
bulk-mineable, near-surface disseminated styles of
mineralisation in this prolific district.
Several skarn bodies occur in the northwest part of
the licence area. These skarns have been probed for
industrial magnetite, but have not been tested for gold.
Cyprus opportunities
While EMED’s highest copper-related priority is in Spain,
low-cost exploration and evaluation work will resume in
Cyprus on various targets and opportunities.
EMED’s exploration in Cyprus is centred on the
Troodos ophiolite complex. The targeted mineralisation
style is volcanic-hosted massive sulphide copper
deposits under shallow cover rocks, similar to the larger
Cyprus copper mines of the past.
The higher metal prices of recent years have
materially improved the economics of several known
base-metal deposit on EMED’s tenements in Cyprus.
This prompted an evaluation of the company’s local
assets, and identified as a high priority the Klirou
copper-zinc project, located 20km southwest of Nicosia.
A review of the project in late 2007 by AMC
highlighted several key areas for further work, including
an expansion of resources, diamond core drilling to verify
and upgrade the categorisation of known resources,
further assessment of the refurbishment of the nearby
Mitsero processing plant, and the collection and
collation of firm cost estimates.
Potential remains to increase known mineralisation
by infill drilling and step-out drilling. Some of the
deposits are likely to have faulted extensions and may
have repeats along strike within areas containing
geophysical anomalies.
CONTACT
EMED Mining
Group Operations Centre:
La Dehesa, s/n. 21660 Minas de Riotinto. Huelva.
España
Cyprus office:
3, Ayiou Demetriou St, Acropolis 2012, Nicosia, Cyprus
Tel: +357 2244 2705 Fax: +357 2242 1956
E-mail: info@emed-mining.com

22
EXPLORATION SPECIAL
The search hots up
THE number of companies reporting
assay results has soared over the past
two years, and the reports from
international laboratories are now
coming in at more than twice the rate
compared with mid-2009.
Data from Perth-based Intierra Ltd shows that the
number of metals projects that reported assay results
in the quarter to end-December 2011 rose almost
30% year-on-year to 1,140. This compares with only
880 in the final quarter of 2010, and 662 in the final
quarter of 2009.
A total of 2,465 metals projects reported assay
data last year (compared with 2,057 in 2010). The
project locations of these assay reports are plotted
on the map opposite.
The Intierra database incorporates press releases
directly from the various stock exchange filings, and
registers the three best assay results in each case.
These records show the number of gold projects
reporting assay results in the three months to
end-December reached 785, compared with 605 in
the quarter a year ago and only 454 two years ago
(see graph).
There has been a similar story for copper assay
reporting. Intierra reports 267 projects filing such
reports in the final three months of last year,
compared with 206 a year earlier (an increase
of almost 30%). The copper projects reporting assays
in the final quarter of 2009 was just 144.
The assay reports for silver projects (note there is
some double counting between the commodities)
totalled 277, 192 and 130 for the final quarters of
2011, 2010 and 2009, respectively.
The rate of activity appears to have been
maintained so far this year. The following is a
summary of some of the exploration work reported
in Mining Journal during the past two months.
North American interest
Precious-metals exploration activity has been
noteworthy so far this year in Canada. For example,
Claude Resources Inc recently confirmed the
presence of high-grade gold mineralisation at the
Santoy Gap zone within its Seabee gold mine in
Saskatchewan. The holes intersected mineralisation
at depths of more than 500m.
Mining Journal special publication – PDAC
An independent feasibility study for the jointventure
Ajax copper-gold project in British Columbia
has found reserves could support a 23-year open-pit
operation, reported 49%-owner Abacus Mining &
Exploration Corp. The project, 51%-owned by
KGHM Polska Miedz SA, was based on reserves
estimated in the study to contain 3,000Mlb (1.36Mt)
of copper and 2.7Moz of gold.
In the Yukon, Alexco Resources Corp has
intersected mineralisation over a 500m strike length
near its processing plant in the Keno Hill District.
A revised resource model for Seabridge Gold Ltd’s
Courageous Lake gold project in Canada’s Northwest
Territories has increased contained gold within
measured and indicated resources by 1.2Moz to
about 8Moz. A drilling programme completed last
year contributed data from 52 holes for 15,000m,
focused on previously-categorised inferred resources
within an open pit defined by a 2011 study. The latest
estimate will be used in a prefeasibility study due for
completion in May this year.
In Ontario, ongoing drilling at Rainy River
Resources Ltd’s namesake gold project has confirmed
the continuation of mineralisation below the planned
open-pit development. Extensions were intersected
below both the Cap and ODM pit outlines.
Also in Ontario, Moneta Porcupine Mines Inc has
filed a NI 43-101 independent technical report for a
resource estimate at its Golden Highway gold
property. The estimate, by P&E Mining Consultants,
defined more than 3Moz of gold within indicated
(1Moz) and inferred categories (2Moz) at the
Windjammer South, Southwest and 55 zones.
Other commodities are also attracting attention. In
Nunavut, for example, Canadian Orebodies Inc has
received the first resource estimate for its Haig Inlet
iron-ore deposit. The calculation, by consultant GH
Wahl, defined 230Mt at an average 35.2% Fe in the
indicated category, and 289Mt at 35.5% Fe in the
inferred category.
In Quebec, Matamec Exploration Inc has received a
preliminary economic assessment for its Kipawa
rare-earths project, and plans to progress work to
the feasibility stage.
Also in Quebec, an independent resource estimate
for Strateco Resources Inc’s Matoush uranium
deposit has increased contained uranium within
Aerial view of Claude Resources
Inc’s Seabee gold mine
Source: Intierra Resource Intelligence
800
700
600
500
400
300
200
100
0
Gold
Silver
Copper
2009 2011
Projects reporting assay results
Source: Intierra Resource Intelligence
inferred resources by 50% compared with the
previous 2009 estimate, to 8,720t. Consultant Roscoe
Postle calculated indicated resources of 453,000t at
an average grade of 0.78% U3O8, and inferred
resources of 2.04Mt at 0.43% U3O8, using a cut-off
grade of 0.1% U3O8.
In the US, Orvana Minerals Corp’s Copperwood
copper-silver deposit in Michigan’s Upper Peninsula
could support a 13-year operation, according to an
independent feasibility study. The study, prepared by
three consultants, found that an underground mine
using room-and-pillar techniques could yield 6,800t/d
of ore, or about 2.4Mt/y. Proven reserves were
estimated at 21Mt at an average grade of 1.46% Cu
and 3.98g/t Ag, with probable reserves estimated at
6.4Mt at 1.21% Cu and 2.44g/t Ag.
In South Carolina, Romarco Minerals Inc has
increased the amount of gold contained within
measured and indicated resources at its Haile
gold-mine project by 900,000oz to 4Moz. An
independent resource estimate by Independent
Mining Consultants calculated a 29% increase in the
figure compared with the previous estimate. The latest
estimate was prepared using data from infill drilling at
the project last year, which elevated inferred
resources to the measured and indicated categories.
In Nevada, Yukon-Nevada Gold Corp has
intersected high-grade mineralisation during
confirmation drilling at the Starvation Canyon zone,
part of its Jerritt Canyon operation. Starvation
Canyon was expected to be developed to add to the
existing operation.
Also in Nevada, Rye Patch Gold Corp has
recorded gold and silver mineralisation within its LH
claims, part of the disputed Rochester property
around Coeur d’Alene’s Rochester open-pit silver
mine. Each company has filed a lawsuit against the
other concerning the land, in a dispute that arose
when Rye Patch challenged Coeur’s ownership.
In Michigan, the second phase of drilling at Aquila
February 2012

Resources Inc’s Peninsula gold property has
intersected further mineralisation within a shear zone
that was discovered during initial drilling.
In Montana, Tintina Resources Inc’s drilling at the
renamed Black Butte copper property (formerly
Sheep Creek) has tested the Strawberry East target.
Across the border in Mexico, Geologix Explorations
Inc has been busy at its Tepal gold-copper-silver
deposit in Michoacán. The company has confirmed a
high-grade zone which it expects to develop as a
starter pit.
Elsewhere in Mexico, Silvercrest Mines Inc has
received an independent resource estimate for the La
Joya silver property in Durango. Inferred resources
were estimated at 57.9Mt at an average grade of 28g/t
Ag, 0.18g/t Au and 0.21% Cu, using a cut-off grade of
15g/t silver-equivalent.
South American opportunities
In Argentina, Lumina Copper Corp has intersected
long intersections of copper-gold-molybdenum
mineralisation at its Taca Taca porphyry deposit.
The latest intersections included the longest interval
of mineralisation drilled at the project, totalling 813m
at an average 0.60% Cu equivalent, and were 300m
from previous drilling that defined the boundary of
the 2011 resource. Indicated resources were
estimated at 516Mt at an average grade of 0.58% Cu,
0.12g/t Au and 0.018% Mo, with inferred resources
estimated at 880Mt at 0.43% Cu, 0.08g/t Au and
0.015% Mo.
Also in Argentina, an independent feasibility study
for Minera IRL’s Don Nicolas gold-silver project in
Argentina’s Santa Cruz province has outlined reserves
containing about 200,000oz of gold and 400,000oz of
silver. The open-pit operation, designed by consultant
Wardrop, would feed a conventional crush, grind,
carbon-in-leaching treatment plant at a rate of
350,000t/y, for a mine life of 3.6 years initially.
In Brazil, Crusader Resources Ltd, infill drilling at
February 2012
Geologists at Atacama Pacific
Gold’s Cerro Maricunga site
its 2.3Moz Borborema gold deposit has intersected
con firmatory mineralisation in the Central and
Southern zones from surface to a vertical depth of
265m.
Overall resources at Horizonte Minerals plc’s
Araguaia lateritic nickel project in Brazil’s Pará state
have been revised to just over 100Mt, compared with
the previous 76.6Mt. The independent calculation also
defined indicated resources for the first time. The
latest estimate included indicated resources of 39.3Mt
at 1.39% Ni, plus 60.9Mt in the inferred category at a
grade of 1.22% Ni.
Also in Brazil’s Pará state, Sun Mining Corp said
its Volta Grande gold project contains more than
3.7Moz of gold, according to the latest independent
resource estimate. The company noted that the
calculation increased the amount of gold contained
within measured and indicated categories by 70%
compared with the previous resource in April last
year, to 2.2Moz.
In Chile, Atacama Pacific Gold Corp has confirmed
wide intervals of gold mineralisation at its Cerro
EXPLORATION SPECIAL
Maricunga project. The deposit was estimated last
year to contain 92.8Mt at 0.54g/t Au for 1.62Moz of
gold in indicated resources, at a 0.3 g/t Au cut-off,
with a further 116.7Mt at 0.52 g/t Au for 1.95Moz
inferred.
BHP Billiton has increased the resource estimate
for its Spence copper mine in northern Chile’s
Atacama desert by almost 700%, after declaring
2.35Gt of hypogene sulphide mineralisation.
According to the group, the chalcopyrite-rich material
represented an extension to the supergene
mineralisation (comprising chalcocite and copper
oxides) that is mined at the open-pit operation.
The first independent resource estimate for South
American Silver Corp’s Escalones polymetallic deposit
in Chile, compiled in accordance with Canada’s NI
43-101 guidelines, has delineated more than 1.7Mt of
copper within the inferred category. Inferred resources
were estimated at 420.6Mt at an average grade of
0.41% Cu, 61.4ppm Mo, 0.05g/t Au and 1.24g/t Ag.
Also in Chile, Herencia Resources plc has received
the final assay results from a drill programme
completed last year at the 70%-owned Paguanta
polymetallic property. The holes returned results
from the Patricia zone, and discovered a new vein at
the zone.
The latest independent resource estimate for
Seafield Resources Ltd’s Miraflores gold deposit in
Colombia’s Quinchia district has increased contained
gold within the measured and indicated categories by
57%. The estimate, by Scott E Wilson Consulting, was
based on data from 35 holes for more than 15,600m
and 236m of channel-sampling. Measured and
indicated resources contained more than 1.9Moz of
gold, using a 0.3g/t Au cut-off grade.
Also in Colombia, Batero Gold Corp has received
the final assays for drilling completed during 2011,
with the latest results coming from holes testing the
Dos Quebradas, El Centro and La Cumbre zones at
the Batero-Quinchia property.
Mining Journal special publication – PDAC
23

Company profile
Baja Mining’s work ethic proving
fundamental to success at Boleo
Baja Mining Corp (TSX:BAJ; OTCQX:BAJFF) is a
Canadian mine-development company with
a 70% interest in the Boleo copper-cobaltzinc-manganese
project located near Santa
Rosalia, Baja California Sur, Mexico. Boleo is
fully funded and remains on target for production to
commence in the first half of 2013.
John Greenslade, Baja president and CEO, first staked
the Boleo site in 1992 and, since then, the company has
systematically developed its partnerships and internal
resources.
Minera y Metalurgica del Boleo SA de CV (MMB)
owns 100% of the mineral concessions covering the
Boleo deposit. Baja owns a consolidated 70% interest in
MMB, with the remaining 30% held by a Korean
consortium including Korea Resources Corporation,
LS-Nikko Copper Inc, Hyundai Hysco Co Ltd, SK
Networks Co Ltd, and Iljin Materials Co Ltd.
The high-grade deposit hosts a NI 43-101-compliant
global reserve of 85Mt, grading 1.33% Cu and an M&I
resource of 265Mt grading 0.76% Cu, with cobalt and
zinc, by-products. The company is exploring the
mang anese potential at Boleo but, to date, has not
included manganese in its economics. The company
has currently scheduled the first 23 years of mining.
Copper production at the Boleo site is at an advanced
stage of development, with production anticipated
in a little more than a year. Boleo is expected to be a
low-cost/long-life producer with life-of-mine cash
costs net of by-product credits of -$0.29/lb (based on
the NI 43-101 March 2010 Technical Report; reserves
included in resources).
Simulators are used to train drivers for
the earth-moving trucks
Bringing the project to life
Building an operation the magnitude of Boleo
from the ground up, in a remote location on a
tight schedule, required a strong management
team with diverse and specific skills.
A significant requirement, particularly after the
economic downturn in 2008, was to fund the rest
of the Boleo project. In 2010, John Greenslade and
the Baja team raised over US$1.1 billion – an
accomplishment that fully funded the project and
garnered two prestigious awards for its
effectiveness.
While financing was being sought, Baja’s
human resources team began identifying the
behaviours that future employees must
demonstrate on the job. Those behaviours were
translated into competencies, which have since
become the guideposts for recruitment strategies
and policies, performance-management
programmes, as well as training and development
initiatives.
Boleo’s international location meant a need to attract
as many candidates with international experience as
possible, a preference for exposure to Latin-American
cultures and/or fluency in Spanish. Training was
initiated to fill the skills gaps, promote understanding of
cultural differences, as well as communicate the value
of adapting behaviours to foster more effective
communications and improve workplace relationships
in foreign locations.
Also critical to the process was corporate
governance. This required the development of a
comprehensive manual of codes and procedures that
form the backbone of how Baja and its people work as a
team, as a company, and as good corporate citizens.
Developing a mine in Mexico meant identifying the
issues that, for Mexico, were most important. Baja has
worked diligently to respect the local community and
create a benefit for its citizens. Local suppliers are used
when possible for site requirements, and community
engagement is paramount.
A conscious effort was made to employ local
residents where possible. Local women were hired and
trained to drive the many large earth-moving vehicles.
Professionals from, and educated in, Mexico were hired
for important jobs in areas such as construction, mining
www.bajamining.com
Boleo
ê
operations and geotech. Further local support is
provided for the thousands of employees on site with
local medical services, laundry and meal services.
Extraordinary efforts were made to protect the
historic ‘cardones’, or giant cactus, at site. Those
removed from areas where processing infrastructure
was planned were moved to a temporary protection
area prior to relocation within the 19,500ha property.
Each transplanted cardon was examined to evaluate its
health, nurtured or cultured, prepared for transplant,
and moved to a location that allows it to thrive. All were
tagged and are now monitored to ensure their
long-term health.
Based largely on its local community-engagement
efforts, Baja has received full support for its initiatives in
Santa Rosalia and the surrounding towns.
CONTACT
Baja Mining Corp
500-200 Burrard Street, Vancouver,
BC, Canada V6C 3L6
Tel: +1 604 685 2323
Fax: +1 604 629 5228
Email: info@bajamining.com
The production plant at Baja Mining’s Boleo site is growing and changing daily

In Peru, Metminco Ltd has completed the third
phase of drilling at Los Calatos copper-molybdenum
property, with the results interpreted to have
extended the length of the mineralised zone to more
than 1.2km.
Hochschild Mining plc has received independent
feasibility studies for the Inmaculada and Crespo silver
projects in Peru, both of which indicated that
development of the respective projects would be
profitable. Hochschild holds a 60% interest in
Inmaculada, 4,200-4,800m above sea level in Ayacucho
department. Proven and probable reserves are
estimated at 7.8Mt at an average grade of 3.37g/t Au
Drilling at Stratex’s Öksüt project in Turkey
and 120g/t Ag, using metals prices of US$1,100/oz for length of 1.2km and a width of up to 850m.
gold and US$18/oz for silver.
In Bulgaria, Euromax Resources Ltd has completed
Also in Peru, Macusani Yellowcake Inc is focusing on further drilling at its Trun gold property, targeting the
exploration of the Kihitian uranium property, and a Ruy and Logo zones. The company said that
resource estimate is expected to be announced soon. mineralisation at the property is associated with large
Infill drilling at Azimuth Resources Ltd’s West Omai granite and syenite stocks that intrude metamorphic
gold property in Guyana has continued to intersect rocks in a broad anticline.
high-grade mineralisation. The results were to be There has been considerable exploration activity in
included in an upcoming resource estimate in March. Turkey. For example, drilling by Dedeman Madencilik,
the operator of the Balya exploration property (over
European scene
which Eurasian Minerals Inc holds a royalty right) has
Notwithstanding the euro crisis, exploration is robust expanded base-metal mineralisation.
in Europe. For example, Stratex International plc In Spain, Berkeley Resources Ltd has completed
recently received a revised resource estimate for the a preliminary feasibility study for the first stage of its
joint-venture Öksüt gold project in Turkey that Salamanca 1 uranium project. Berkeley considered
delineated 230% more gold than the previous
the exploitation of two deposits at Salamanca 1
calculation. The estimate, by consultant Wardell (Retortillo and Santidad) and the study’s findings
Armstrong, included data from last year’s drilling formed the basis of an exploitation plan prepared by
programme at the Ortaçam and Ortaçam North consultant CRN.
deposits. Stratex said that the total of just over
Also in Spain, EMED Mining Public Ltd expects to
1Moz of gold included about 560,000oz in oxide and gain a permit shortly for a reopening of the Rio Tinto
485,000oz in sulphide mineralisation.
copper mine. Work is expected to start later this
Also in Turkey, Pilot Gold Inc has received the first year, with production to commence in 2013.
resource estimate for its 40% owned Halilaga
Regarding precious-metals exploration in Spain,
porp hyry copper-gold deposit, which was discovered Astur owns the Salave gold project in the northern
by the management team when in charge of Fronteer Asturias province. The project has an estimated
Gold Inc. Independent consultant Advantage
resource of 17.9Mt at 2.92g/t in the measured and
Geoservices calculated indicated and inferred
indicated categories for 1.7Moz.
resources containing 3.3Moz of gold and 960,000t of Renaissance Gold Inc has defined a new district of
copper. The estimate was based on the Kestane zone, copper-gold mineralisation in an historic iron-ore min-
where CJSMJournal1/3ADFILM:Layout mineralisation has been defined 1 over 12-02-15 a strike 2:50 ing PM district Page in 1southern
Spain referred to as the Baza
February 2012
EXPLORATION SPECIAL
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project. This project includes a large land position
covering many occurrences of siderite-albite veining.
Specific areas have a significant Cu-Au tenor and
samples up to 20 g/t Au and 10% Cu have been found.
In Armenia, Lydian International Ltd has published
a resource estimate for its Amulsar gold project. This
defined more than 3Moz of gold within combined
indicated and inferred categories. The calculation,
by consultant Independent Mining Consultants,
designated indicated resources containing 2.1Moz,
and a further 1.1Moz within the inferred category.
Most of the total was defined within the contiguous
Tigranes-Artavasdes areas, and the remainder within
the recently-defined Erato zone, about 900m away.
In Greenland, independent mining studies for
Ironbark Zinc Ltd’s Citronen zinc-lead project have
outlined more potentially-mineable material, following
a resource upgrade. Ironbark’s resource update
defined more mineralisation within the measured and
indicated resource categories. The measured category
was estimated at 24.8Mt at 5.2% Zn and 0.6% Pb,
indicated 27.6Mt at 5.6% Zn and 0.5% Pb, and inferred
20.6Mt at 4.7% Zn and 0.4% Pb.
Exploration booming in Africa
Tanzania remains a popular destination. For example,
exploration amounting to US$40 million, including
166,000m of drilling, has been used to quadruple
African Barrick Gold plc’s estimate for Tusker gold
deposit, part of its Nyanzaga gold project.
African Barrick calculated that Tusker contained
3.5Moz of gold within indicated resources captured
by an open-pit outline designed using a gold price of
US$1,400/oz, with an additional 0.6Moz in the
inferred category. The previous estimate for the
deposit contained about 313,000oz of gold within
indicated, and 650,000oz in inferred categories.
An independent estimate has doubled contained
gold within measured and indicated categories at
Helio Resource Corp’s SMP gold project in Tanzania
to just over 1Moz. SRK Consulting calculated the
overall tonnage for four deposits (Porcupine, Kenge,
Konokono and Tumbili), using a 0.5g/t Au cut-off
grade. Using a higher cut-off grade of 0.7g/t Au,
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Mining Journal special publication – PDAC
25

Exploring a better way
Country location map (above) and plan map
Company profile
Batero Gold Corp (TSX-V: BAT) has “something
significant” in Colombia. President and
CEO Brandon Rook told Mining Journal
that the company’s Batero-Quinchia
project encompasses multiple porphyry
gold targets and already justifies “long-term planning”.
As of early January, the company was evaluating last
year’s drill data to finalise a focused follow-up
programme for 2012.
Batero expects to publish its first independent
resource estimate (by Roscoe Postle Associates Inc) in
early 2012 and will immediately begin a Preliminary
Economic Assessment.
Mr Rook notes that the company has accomplished a
lot in a short time. In 2008, he identified Colombia as
having “amazing geology” and being a safe political
environment in which to invest. He then started looking
for a project that “ticked all the boxes”, securing the
rights to Batero-Quinchia in 2010.
High potential
Batero is focused solely on Colombia, and, in particular,
on the country’s emerging Middle Cauca porphyry gold
and copper belt.
This belt already hosts two significant gold deposits:
Gran Colombia’s Marmato project (containing 12.4Moz
of gold 20km north of Batero-Quinchia) and AngloGold
Ashanti’s La Colosa (16.27Moz of gold 100km to the
southeast). The belt also hosts the significant porphyry
gold deposits of Titiribi, La Mina and Quebradona.
At the centre of the latest excitement is Batero’s
100%-owned 1,407ha property within the municipality
of Quinchia in the department of Risaralda (some 55km
north of Pereira, the regional capital). The region is
considered socially stable and mining-friendly, and
projects in the area are supported by comprehensive
infrastructure, including roads, water and power.
Three gold-copper porphyries were identified by an
earlier programme in 2006 after early-stage drilling on
the property. These porphyries are spaced over a 2km
north-south strike length at elevations between 1,600m
and 1,950m.
The intrusives are composed of dykes and stocks
emplaced in intermediate to felsic volcanic rocks of the
Miocene Combia Formation and in Cretaceous basalts.
All of the targets host gold and copper mineralisation.
The mineralised zones encountered to date form
part of a regional system covering more than 300ha.
This district’s recognised core extends over 2km from
La Cumbre through El Centro (encompassing the target
areas of Manzanillo, La Lenguita and El Cedral) to Dos
Quebradas.
Achievements in 2011
The company recently completed a 55,755m
diamond-drill programme on time and on budget.
Over the past year, Batero has aggressively delineated
an area of gold and copper mineralisation at or near
surface, expanding the overall footprint of the
La Cumbre porphyry over 600m in a NW-SE direction
and over 400m in a NE-SW direction. The company
also extended mineralisation to a depth of 756m at
the La Cumbre porphyry, which remains open at depth
and in several directions.
The company also drilled the northern area of the
property at Dos Quebradas and extended the
gold-copper system about 950m to the south through
the El Centro zone about 950m.
Mr Rook said he was “encouraged by the continuity
of the Dos Quebradas gold-copper system from the
El Centro porphyry mineralisation in the south through
to the north concession boundary. The drill results show
a large extension of structurally controlled related
porphyry mineralisation within the basalt host rocks
continuing to the northern limits of the concession.
Also, the new results indicate that mineralisation is
present near surface and at depth.”
Exploration drilling at the El Centro zone led
to a discovery of the La Lenguita porphyry along
with near-surface high-grade gold epithermal
mineralisation. Structurally-controlled epithermal
gold mineralisation was also discovered along the
Amarilla Structural Corridor east of the La Cumbre
porphyry, which also overprints the porphyry systems
at La Cumbre and El Centro.
The company has identified continuous mineralisation
along an approximate 2km strike length from the
Dos Quebradas porphyry through the El Centro zone to
the La Cumbre porphyry. Batero also made a discovery

Examining cores at the core shack
at Matecana, 800m southeast of La Cumbre. The
company says this project suggests that the district
has “strong potential to be expanded with further
drilling”. The expansion of
mineralisation from Matecana to La
Cumbre would further extend the
N-S strike of the project’s gold-copper
mineralisation to about 2.8km.
Goals for 2012
Batero will build on the highly
successful 2011 field exploration and
diamond-drill programme by
strategically expanding the near-
and at-surface higher-grade gold mineralisation at the
La Cumbre porphyry.
The company will also define the size and extent of
the near-surface high-grade gold epithermal
STRONG LOCAL TEAM
Batero’s strong management and technical team in
Colombia has contributed to numerous significant
discoveries throughout the country.
In December, Batero announced the appointment
of Dr Darryl Lindsay as chief operating
officer and senior vice president, and as president
of the company’s wholly owned Colombian
subsidiary, Minera Quinchia SAS. Dr Lindsay was
also appointed to Batero’s board of directors and
brings 20 years of experience as an exploration
geologist and project manager for major porphyry
mineral development programmes in South
America from inception through to feasibility.
In a very short time, Batero has aggressively
moved forward with financing, exploring and
proving the resource and has achieved significant
milestones as the project moves from exploration to
feasibility.
“We are committed
to moving this
project forward and
delivering value to
shareholders”
mineralisation in, and adjacent to, the Amarilla
Structural Corridor, which is contiguous with the
eastern boundary of the La Cumbre porphyry.
The Amarilla Structural Corridor, a high-priority target,
is over 3km long, 200-400m wide, and strikes NNW-SSE
across the company’s concession. Significant drilling
highlights last year included hole QAP-DDH-034,
intersecting 5.80m grading 11.42g/t gold at just 9.80m
below surface.
The company’s strategy for 2012 will include
exploring additional targets that have been identified
from the first phase of the company’s field programme
from mapping, geochemical and geophysical
programmes. Over 70% of the concession block is yet to
be explored.
Batero will also continue to determine the presence
and extent of a gold-rich oxidation horizon overlying a
potential epithermal centre in the eastern part of El
Centro which is supported by gold-in-soils anomalies
and 2011 scout drilling.
Securing value
Batero recently received confirmation
from Ingeominas that 100% of
the property is now covered by
concession agreements allowing
long-term future exploitation of the
project.
Mr Rook said the company has
also secured all surface rights in the
immediate area of the La Cumbre
porphyry and that the company will extend these
surface rights over new discoveries, and areas that
might be required for development infrastructure.
Mr Rook described this as a “major accomplishment
that clearly demonstrates to investors that we are
committed to moving this project forward and
delivering value”.
Corporate social responsibility
Reflecting the enormous potential of the project, Batero
has begun ‘long-term planning’, including a major focus
on corporate social responsibility (CSR).
In an interview with Mining Journal, Mr Rook
stressed that the Vancouver-based company “has a
conscience” and is formalising CSR “from the ground
up with a forward-thinking approach” that is
progressive for most junior and even mid-tier
companies.
The company is investing in environmental and
social programmes to build what Mr Rook describes as
“positive relationships with local communities” that will
ensure the sustainability of long-term objectives for the
company and its community neighbours.
To help with its CSR policies and practices, Batero
engaged consultancy Greenspirit Strategies and
www.baterogold.com
conducted extensive consultations, surveys and
baseline studies to better understand the local people
and the environment.
Mr Rook noted that Batero now has a “close working
relationship with the local community”. He said the
company’s “determination to improve the lives of
local people has created an environment where
the surrounding community supports this project
moving ahead”.
For example, families have participated in Batero’s
‘Farms for the Future’ programme and have “improved
their quality of life and increased their agricultural
production and incomes substantially”.
Batero is also investing in water management and
educational opportunities “because these are critical
areas for community development in Quinchia”.
CONTACT
Batero Gold Corp
3703-1011 W Cordova Street
Vancouver, BC, V6C 0B2 Canada
Tickers: TSX-Venture: BAT
Frankfurt Exchange FWB:68B
Pink Sheets: BELDF
Tel: +1 604 568 6378
Fax: +1 604 568 6834
E-mail: info@baterogold.com

28
EXPLORATION SPECIAL
contained gold within M&I categories was estimated
at 980,000oz.
Also in Tanzania, reverse-circulation and
diamond-drilling at the Buckreef gold property by
Tanzanian Royalty Exploration Corp (TRE) has
returned mineralisation down-dip of known zones.
Gold was produced from the Buckreef property
during the 1980s, and TRE holds the right to earn a
55% interest from state-owned company Stamico.
In Burkina Faso, Roxgold Inc has received assays
from the second phase of drilling that targeted the
Bagassi Central zone of its Yaramoko gold property.
The results indicated continuity of mineralisation
from surface to 475m depth.
Volta Resources Inc’s continuing drilling programme
at the Kiaka gold property in Burkina Faso
has returned further mineralisation to a depth of
350m. The latest resources estimate for Kiaka
outlined measured and indicated categories containing
just over 3Moz (previously 1.4Moz), while inferred
resources are estimated to contain 1.2Moz . The
deposit has been defined over a strike length of more
than 1.5km so far, and to at least 450m depth, and
remains open along strike and down dip.
Also in Burkina Faso, Golden Rim Resources Ltd
has intersected 57m at an average grade of 23.3g/t Au
during drilling at its Balogo gold property. The
intercept was included in the first 13 holes of the
third phase of reverse-circulation drilling.
In Eritrea, Sunridge Gold Corp has received an
updated resource estimate for the Emba Derho
polymetallic deposit, completed as part of a
prefeasibility study. Consultants Snowden and AMC
should complete the study, based on the Emba Derho,
Adi Nefas (zinc-gold-copper) and Gupo (gold)
deposits, in April. Snowden calculated the latest
estimate for Emba Derho, defining measured and
indicated (M&I) resources containing about 454,000t
of copper, 950,000t of zinc, 506,000oz of gold and
18.6Moz of silver. Additional, inferred resources were
estimated to contain 15Mt of mineralisation.
In Ethiopia, Tigray Resources Inc has continued
diamond drilling at the Harvest copper-gold-silver
property, targeting the Terakimti prospect.
In South Africa, Platinum Group Metals Ltd has
extended PGM mineralisation intersected at depth
below cover in the Waterberg region. The firm
regards the mineralisation as a northern extension of
the North Limb of the Bushveld Igneous Complex.
In Sierra Leone, Polo Resources Ltd has confirmed
CSA GLOBAL
CSA Global is a leading geological, mining
and management consulting company
which provides high-quality solutions to
its clients in the global minerals industry.
CSA Global is an independent company, with
origins dating back to Ireland in 1984. CSA has been
based in Australia since 1986.
In 2005, CSA Australia merged with FinOre, a
consultancy specialising in mining geology, resource
modelling and mine planning.
In 2008, CSA Global opened a UK office in
Horsham, near London, and a Northern Territory
office in Darwin. Its Queensland office opened in
Mining Journal special publication – PDAC
Asian delight
Mongolia is at the centre of considerable
exploration and mining interest at the moment. For
example, Voyager Resources Ltd has intersected
further copper-silver mineralisation at another zone
of its KM property in the South Gobi region. The
firm discovered mineralisation at the Cughur and
Gaans prospects last year, and the latest drilling
results included additional intercepts from both.
In Malaysia, drilling in and around the Jugan
deposit at Olympus Pacific Minerals Ltd’s
83.25%-owned Bau Central gold property has
confirmed extensions to defined mineralisation.
The holes were completed as part of the
preparations for feasibility studies.
In Papua New Guinea (PNG), Highlands Pacific Ltd
has received an independent estimate for two
deposits at the Frieda River porphyry district, raising
contained metals within the district to 12.9Mt copper
and 20Moz gold. Using data provided by Highlands
Pacific, consultant Hellman & Schofield estimated that
the two deposits contained 2.3Mt of copper and
4.9Moz of gold within inferred resources.
Also in PNG, the latest resource estimate for
the Mt Kare gold-silver deposit contains 1.76Moz
of gold and 20.4Moz of silver, reported owner
Indochine Mining Ltd. The calculation delineated
the continuity at depth of mineralisation at the
Komahun deposit. The drilling included exploration
and infill drilling at the property, which was the subject
of a scoping study in 2009 by a previous operator.
In Liberia, Hummingbird Resources plc has
received a 2Moz independent resource estimate for
the Tuzon deposit, part of its Dugbe property, at
which the Dugbe F deposit was estimated last year to
contain 1.7Moz. The two deposits are about 2.6km
apart, and Hummingbird considered that Tuzon could
be part of the already proposed Dugbe development.
Inferred resources at Tuzon were estimated at
52.8Mt at an average grade of 1.21g/t Au.
In Mozambique, Baobab Resources plc has
completed the first holes at the Tenge prospect of its
85%-owned Massamba iron-ore vanadium and
titanium property.
In Ivory Coast, La Mancha Resources Inc has
intersected gold mineralisation that suggested an
800m-long zone at its Sissedougou property, hosted
Company profile
Brisbane in 2009, and a Jakarta office was opened
later in the same year.
CSA Global has a high level of technical expertise
in most mineral commodities, gained from over
25 years’ experience within the exploration and
mining industry at an international level. It has
experience in all stages of the mining cycle, from
project generation to production. Its services include:
• Exploration and evaluation;
• Data management and mining;
• Resources and mine geology;
• Mining and projects; and
• Community development and sustainability.
0.7Moz in the indicated category, and 1Moz in
inferred.
In the Philippines, Mining Group Ltd has received
assays from recent drilling that it regarded as
confirming the potential of the Tagpura skarn target
of its Comval copper property. The holes were
completed by Cadan Resources Corp, from which
Mining Group has agreed to buy an 80% interest in
the project.
Also in the Philippines, Indophil Resources NL
has received an updated resource estimate for the
joint-venture Tampakan copper-gold project from
partner Xstrata plc. Xstrata used a 0.2% Cu cut-off
grade for the latest estimate, compared with a 0.3%
Cu cut-off for previous estimates, but also noted
that data from an additional 17,400m of diamond
drilling was included in the latest calculation.
In Indonesia, Archipelago Resources plc has
announced an increase in mineral resources and
ore reserves at its operating Toka Tundung mine
in North Sulawesi. The increase in ore reserves
supports extending the mine life from six to
nine years, with additional stockpile processing
extended from two to seven years. Contained
gold increased dramatically (up 52%), with ore
reserves increasing 60%.
by interbedded meta-conglomerates and meta-graywackes.
Also in the Ivory Coast, the initial diamonddrilling
programme testing sulphide mineralisation at
Cluff Gold plc’s Yaoure (formerly Angovia) gold
property has returned wide zones of gold-enrichment.
The property had been an oxide-gold
heap-leaching operation from September 2009 until
March 2011, when the firm suspended operations
owing to geopolitical unrest in the country.
Kilo Goldmines Ltd has received drilling results
from Rio Tinto, its partner in the Isiro exploration
joint venture in the Democratic Republic of the
Congo, for holes testing the Asonga iron-ore
prospect. Kilo noted that results indicated potential
for direct-shipping ore.
Also in the DRC, Banro Corp has readdressed its
plans for the Namoya gold project, focusing on the
first phase of development, exploiting oxide and
transitional mineralisation. The company’s previous
(2011) revision of the economic assessment for
February 2012

Namoya considered gold recovery from oxide and
transitional material through heap-leaching, compared
with the combined carbon-in-leach-gravity treatment
of all mineralisation in a 2007 study.
In Namibia, initial drilling at Avonlea Minerals Ltd’s
past-producing Abenab vanadium property has
returned combined vanadium-zinc-lead mineralisation.
A revised resource estimate for Marenica Energy
Ltd’s namesake uranium project in Namibia has
reduced contained U3O8 to 57Mlb (25,900t),
compared with the previous total of 138Mlb.
Consultant Optiro used a 20ppm U3O8 grade
envelope to constrain mineralisation, while the
previous estimate, prepared by consultant SRK as
part of a scoping study, was unconstrained. The
overall previous estimate defined a potentially-mineable
resource of 269Mt at 107ppm U3O8.
Also in Namibia, a scoping study for development
of Deep Yellow Ltd’s 95%-owned Shiyela iron-ore
project has indicated potential for an operation
producing 2Mt/y concentrate. Consultant ProMet
designed an open-pit mine exploiting resources within
the M62 and M63 deposits, feeding a processing plant
including a haematite-concentration circuit with
magnetite concentration.
In Zambia, Blackthorn Resources Ltd has
continued drilling at its 100%-owned Mumbwa
iron-oxide copper-gold project, intersecting wide
zones of high-grade copper mineralisation. The latest
results come from the fifth phase of drilling, which
included holes at the Kitumba deposit and Mutoya
target. At Kitumba, where inferred resources were
estimated in 2009 at 345Mt at an average grade of
0.47% Cu, 0.06g/t Au, 1.38g/t Ag and 45ppm U3O8
(using a cut-off grade of 0.20% Cu), infill drilling
returned a better result of 222.3m at 2.15% Cu.
In Botswana, Discovery Metals Ltd has completed
further drilling at the Zeta North prospect within its
Boseto copper project, scheduled for initial
production this year. The latest results confirm the
presence of copper-silver mineralisation.
Australia at centre of interest
Western Australia (WA) remains a hub for mineral
exploration. Activity so far this year has included
further assays from drilling by Phoenix Gold Ltd at its
Castle Hill gold property. The company said that the
latest results extended the zone of mineralisation by
600m to more than 5km.
Also in WA, Grange Resources Ltd has reported
that its 70%-owned Southdown magnetite iron-ore
project contains more than 1,200Mt (1.2Gt) of
resources, according to the latest independent
estimate. The calculation, prepared by consultant
BMGS Perth, was based on data provided by Grange,
which noted the updated total represented an
increase of 75%. The data came from drilling that
extended over the entire 12km strike length of the
mineralisation within the Southdown property.
Westgold Resources Ltd has revised a resource
estimate for its plan to revive gold mining in the
Murchison area of WA. The firm’s personnel, with
external consultants, delineated resources and
reserves within 27 zones at its Central Murchison
project that contained a combined 2.7Moz of gold,
with reserves estimated at 855,000oz within the
resources.
Meanwhile, Fortescue Metals Group Ltd (FMG)
and Iron Ore Holdings Ltd (IOH) have signed a
February 2012
binding memorandum of understanding concerning
IOH’s 260Mt Iron Valley iron-ore project in WA’s
Pilbara region. FMG has paid IOH A$25 million
(US$26.8 million) for the option, which, if exercised,
would grant FMG a licence to mine the Iron Valley
deposit and the Weeli Wolli property.
Magnetite iron-ore resources at the Mt Bevan
property in WA have nearly tripled to 1,600Mt
(1.6Gt), according to an independent resource
estimate for Legacy Iron Ore Ltd.
Diatreme Resources Ltd has completed an updated
resource estimate for its Cyclone zircon heavy-
minerals project in WA’s Eucla Basin, as part of the
ongoing prefeasibility study. The latest estimate by
Diatreme defined a total of 136Mt within measured
and indicated categories, at an average grade of
2.3% heavy minerals (HM), 31% of which was zircon,
3% rutile, 6% leucoxene, 23% high-grade (70-85%
TiO2) titanium oxides, 10%

Company profile
Lydian International:
the Armenian story
Lydian International is a TSX main board-listed
mineral exploration and development
company with expertise in discovering and
developing new gold projects in unfamiliar
and frontier settings. Lydian’s key asset is
Amulsar, a gold project in southern Armenia straddling
the provinces (Marz) of Vayots Dzor and Sunnik.
Amulsar project
The Amulsar project covers a region of highsulphidation,
epithermal-type gold mineralisation. It
was discovered by Lydian in 2006 and currently hosts a
global resource of 3.2Moz gold – 2.1Moz at 1.0g/t in the
indicated and 1.1Moz at 0.9g/t in the inferred category.
It is still open in all directions, including depth and is
being advanced towards Bankable Feasibility Study,
due to be completed by the end of Q2 2012, with full
production planned in 2014. It is then envisaged that
the project will be fully permitted (Q2 2012), ready for
the completed detailed engineering studies, due out by
year-end 2012, enabling construction of the
infrastructure to begin. Amulsar will be an open-pit
heap-leach mine – the first such operation in Armenia.
Gold production is predicted for Q3 2014, with an
initial 123,000oz/y of gold in the first three years, with a
ramp-up in year four, increasing annual production to
256,000oz/y of gold (figures based on PEA, July 2011).
The Amulsar gold project is well located in terms of
infrastructure. The main tarmac road between the
Armenian capital of Yerevan (distance: 176km) and the
south of the country passes some 4km to the south of
the project, and the main road is flanked by hightension
electricity lines (which will be used to supply
the project with electrical power). A further tarmac road
passes to the west and north of Amulsar serving the
small town of Jermuk. Water is available from the
Vorotan River – which flows south of the project –
and the Spandaryan reservoir (3km east and 8km southeast,
respectively). A major gas pipeline between Iran
and Yerevan is in the final stages of construction and
passes some 4km east of Amulsar. A fibre-optic internet
cable was laid during 2010 and a small hydro-electric
plant is under construction on the Vorotan River – both
of which are 4km north-east of Amulsar. There are
several small towns and villages in the vicinity, from
where Lydian and its contractors source local labour.
The PEA indicates that the project will be highly
profitable, with a preliminary IRR assessment based on
1.64m mineable ounces only or 45% and an NPV of
515m.
Social responsibility
With a strong social agenda and an understanding
of the complex political backdrop to this region,
Lydian develops its projects responsibly with
exceptional emphasis on social and environmental
awareness and care.
The company minimises environmental impact and
engages local communities in order to deliver
sustainable social development initiatives. Currently,
there are 130 local people employed by Lydian at
Amulsar and, once the mine goes into production, this
figure is likely to increase to 300-500 full- or part-time
workers, fully trained by Lydian International.
Two of Lydian’s largest shareholders are the
International Finance Corporation, part of the World
Bank Group, and The European Bank for Reconstruction
and Development. Both these entities provide
influential in-country support and valuable advice to
manage environmental, social and governance risks.
www.lydianinternational.co.uk
CONTACT
Lydian International
Tel: +44 (0)1534 715 472
Fax: + 44 (0)1534 758 708
E-mail: info@lydianinternational.co.uk
2011 Mines and Money Award
The team at Lydian International were flattered to
receive the Outstanding Achievement award given for
notable exploration success (Amulsar) presented at the
Mining Journal awards dinner at the Mines and Money
conference held in London on December 7, 2011. The
Mining Journal Outstanding Achievement Awards have
been established to honour those individuals and
organisations who have
made a significant
contribution to the
industry and who stand
out from the crowd.
For more
information on
Lydian International
and the Amulsar
project, visit the
website below.
Below: drilling
commences at
Amulsar; Above: the
Amulsar camp and
bag farm; Top: view
south to Tigranes
and Artavasdes;
Top (inset): social
responsibility is taken
very seriously

THE development of mineral resources
is a key driver of global economic
growth but the extent to which it
has fulfilled that potential is varied.
A report from the World Economic
Forum (WEF), in collaboration with the Boston
Consulting Group, explores the views, priorities and
concerns of key stakeholders in mineral development.
The report, entitled ‘Responsible Mineral
Development Initiative’, provides
important guidelines for mineral
exploration and mine development. It
asks where discontent and frustration
most commonly arise, where
improvements can occur, and what can
be done to foster a more responsible,
sustainable mineral development, thus
enabling better integration of mining
wealth into national economies.
The first part of the report focusses
on the challenges around responsible
mineral development, while the second part
summarises stakeholder views on how to address
these challenges. The following material includes
extracts from the report.
Minerals in context
WEF launched its Responsible Mineral Development
Initiative (RMDI) in 2010. It started by asking a global
range of stakeholders to identify the key challenges
around responsible mineral development. It asked
what works, what does not, where discontent and
frustration most commonly arise, and where
improvements can occur.
WEF notes that some of the world’s poorest
countries are rich in mineral resources. Using these
resources effectively offers, it says, “an unmatched
opportunity for social and economic transformation”.
The report reminds us that mineral development
can help drive socio-economic development in ways
that fit with local and national priorities. In particular,
it can contribute to the country’s development by
generating foreign direct investment, export earnings,
government revenues (through royalties, taxes,
licenses and fees), GDP growth and employment.
Achieving responsible, sustainable development is
tough and complicated. Progress is being made along
many fronts in many regions, but there are significant
barriers to progress. These barriers are often highest
in countries where sustainable development is most
needed.
WEF’s research and consultation was underpinned
by workshops across six continents. Participants were
asked how mineral development can occur in a way
that best considers the full social and economic
contributions and costs across the entire life cycle of
a mine, from the onset of exploration through closure
and reclamation, while also fairly addressing the
distribution of costs, benefits, risks and responsibilities
between stakeholders.
RMDI seeks to facilitate ways to help mineral-rich
countries attain socio-economic progress beyond the
February 2012
mining revenues, stimulating broader indirect benefits.
The complexity of the industry, and wide variations in
political, economic, regulatory, physical and cultural
environments, mean that no solution is universally
applicable. As a result, the WEF report does not seek
a ‘recipe’ or all-encompassing solutions.
WEF recognises that while much remains to
be done, excellent contributions to responsible
development already exist. The organisation’s aim,
it says, is to build on this work.
Initially focused on the roles and use
of Mineral Development Agreements
(see below), WEF’s work broadened
in scope, while at the same time
considering how to improve MDAs.
The concept of an RMDI stakeholder is
used frequently throughout this work.
This encompasses mining companies or
their representatives (both national and
international), governments (national,
regional and local), NGOs, representatives
of local communities, indigenous peoples, civil
society, international bodies and multilateral
development organisations, academic institutions and
individuals with interests in mining and its impacts.
The challenges
WEF asks: What are the main obstacles to responsible
mineral development?
Mining is an expensive, long-term business that has
a profound effect on its host societies. Stability and
trust are essential underpinnings of any development.
Companies making heavy, long-term capital
commitments must be sure that they are in a stable
legal, political, social and economic environment.
Stakeholders in those societies need to have
confidence that the economic and social benefits from
mining will be distributed equitably, with respect for
their culture, their environment and their future
economic stability.
WEF held consultations with 250 stakeholders in
13 countries during the RMDI’s first phase. This
highlighted a wide range of concerns that undermine
EXPLORATION SPECIAL
Responsible search for minerals
A report published in February by the World Economic Forum
provides a framework for responsible mineral development
“Achieving
responsible,
sustainable
development
is tough and
complicated”
Six building blocks
Consultations by WEF have made it clear
that there is no one-size-fits-all solution to
the multifarious challenges of responsible
development.
Given the size, length and complexity of most
mining developments, their many effects on their
host societies and the immense differences within
and between those societies, every development is
different as are the measures and devices needed
for its sustainable success.
Instead, stakeholders suggested that solutions
must be developed along parallel dimensions.
A framework of six building blocks was
identified to address recognised challenges and
trust and confidence. An
understanding of these concerns
was further developed through
continued consultation during the
second phase of the initiative.
The variety of concerns
matched the range of country and
company situations, meaning that
no two problems identified were
entirely equivalent. WEF reports, however, that
common themes emerged.
Mining companies have found that in some
countries the risks of investment can outweigh any
potential benefits. Investment is vulnerable if there
are unexpected changes to the law that undermine
the original terms of agreement, since these terms
underpin its economic viability and make investment
possible in the first place. So, companies feel
threatened by rising resource nationalism and its
associated possibility of unexpected dramatic change.
These possibilities will form part of the comprehensive
risk analysis that precedes any investment.
This will also take in the stability and length of the
approvals process, the potential for resistance in the
host country, which in extreme cases may extend to
issues of human security, and the adequacy of local,
regional and national infrastructure.
Governments may suspect they are not receiving
an appropriate share of benefits from a project.
Sometimes this is because agreements made under
previous administrations were marred by corruption
or an imbalance in negotiating capacity. Civil society
can feel that communities are suffering damage to
their health and environment while missing out on
social and economic benefits. All this may be
compounded by poor communication and a lack of
transparency, leading to misunderstanding and distrust.
Six building blocks
The six building blocks (see box, below) reflect the
issues surrounding many developments. They include
economic and social aspects, such as issues around
taxes and royalties, local suppliers and hiring,
give guidance for next steps (the importance of
each depends on its context):
1. Progressive capacity building and knowledge
sharing among all stakeholders;
2. A shared understanding of the benefits, costs,
risks and responsibilities related to mineral
development;
3. Collaborative processes for stakeholder
engagement throughout the life cycle of mining
projects;
4. Transparent processes and arrangements;
5. Thorough compliance, monitoring and enforcement
of commitments; and
6. Early and comprehensive dispute management.
Mining Journal special publication – PDAC
31

Minera IRL: a golden
opportunity in Peru
Minera IRL Ltd is a Jersey-registered
gold-mining company listed on the
London (AIM), Lima and Toronto
stock exchanges with business units,
compris ing all 100%-owned projects, in
Peru and Argentina. With its head office in Lima, Peru, it
operates the Corihuarmi gold mine and is carrying out
feasibility studies on the Ollachea project and the
company’s next gold mine, Don Nicolas in Argentina.
In less than 10 years, Minera IRL has grown a resource
base that has a current inventory of 1.8Moz in the
measured and indicated categories, plus 1.4Moz in the
inferred category.
The Corihuarmi concession, in the high Andes of
Peru, was acquired in 2002 and was taken through the
discovery, feasibility and permitting stages before
raising funds with the 2007 AIM IPO to build the mine.
Corihuarmi began production in 2008 as an open-pit,
heap-leach operation and made a return on capital
within seven months. Current production is about
33,000oz/y at a cash operating cost of US$400/oz. All
gold is sold at the prevailing spot price. Corihuarmi has
a projected mine life into 2015.
The Ollachea project, the company’s flagship, is an
Orogenic gold deposit acquired from Rio Tinto in 2006,
located on the eastern escarpment of the Andes in
southern Peru. Logistics and infrastructure are excellent
as the deposit lies very close to the new Inter-oceanic
highway, readily available hydroelectricity and
adequate water.
Minera IRL acquired the
Corihuarmi concession,
in the high Andes of
Peru, in 2002
An Atlas Copco Boomer 282
operating at Ollachea
Company profile
Following the negotiation of a comprehensive
surface rights agreement with the local Ollachea
community, exploration started in 2008 and rapidly
resulted in a major gold discovery. A positive scoping
study carried out in 2009 led to a pre-feasibility study,
completed in mid-2011. The pre-feasibility study is
predicated upon an underground mine and conventional
treatment plant with a capacity of 1.1Mt/y. The
production schedule is projected to recover over 1Moz
of gold during a nine-year mine life.
The projected economics are compelling and a full
feasibility, currently in progress, is expected to be
completed during Q3, 2012. A 1.2km-long exploration
drive into the deposit is beginning and will allow
further exploration of the eastern strike extent of the
deposit from underground.
The Ollachea deposit remains open-ended along
“Minera IRL is well poised
to grow rapidly, with its
increasing resource base”
Drilling operations at Ollachea
www.minera-irl.com
strike in both directions and down dip. The NI43-101compliant
resource inventory has already increased to
10.7Mt grading 4g/t gold containing 1.4Moz in the
indicated category plus 13.7Mt grading 2.8g/t gold
containing 1.2Moz in the inferred category. Drilling
from surface with two diamond rigs continues to probe
the deposit.
A feasibility study is nearing completion on the Don
Nicolas project in the Deseado Massif in Patagonia,
Argentina. This is predicated upon a high-grade
measured and indicated resource of 1.5Mt grading
6.0g/t gold, containing 280,000oz and 13.4g/t silver,
containing 630,000oz. The project will be based on an
open-pit and conventional gold treatment plant with a
capacity of 1,000t/d.
Extensive exploration is also being carried out by
Minera IRL in Peru and Argentina. The company holds
an extensive 270,000ha tenement package in the
Deseado Massif which has already resulted in a
discovery announced at Escondido in 2010. In Peru,
exploration continues at Ollachea and nearby the
Corihuarmi mine, including the Bethania gold-copper
porphyry project.
A key aspect of Minera IRL’s business is the
comprehensive community programme at Ollachea
and Corihuarmi in Peru. Programmes include health,
education and sustainable development projects.
The company also practises ‘World Best Practice’
environmental programmes.
Minera IRL is well poised to grow rapidly, with its
increasing resource base, an excellent track record in
exploration success and its team of mine developers
and operators with a proven ability to discover
and develop mines in South America.
CONTACT
Minera IRL
Av. Santa Cruz 830,
Piso 04, Miraflores,
Lima 18, Perú
Tel: +(511) 418 1230
Fax: +(511) 418 1270
E-mail: minera@irl.com.pe
A conveyor at
Corihuarmi

environmental questions such as water, waste and
land use, as well as health and safety concerns.
Developing programmes and actions based on
these building blocks should help provide the stability
sought by mining companies and foster the trust
demanded by all stakeholders. The building blocks
apply throughout the life cycle of the project,
supporting all parties through exploration, negotiation,
feasibility, development, operation and
monitoring through to enforcement, closure and
legacy. They should ensure that while the potential
for conflict is minimised, the means for resolving
disputes still exists.
WEF reports that stakeholders raised many
worries about process. Their needs and priorities
related to the ‘how’, rather than the ‘what’. They
seek practical actions that underpin tailored solutions
for each project. The report highlights a selection of
possible actions, case studies and initiatives that
emerged from WEF’s stakeholder consultation.
The case studies show how suggested actions have
been put into practice. The initiatives offer existing
programmes or toolsets to which stakeholders can
look for further advice or help with implementation.
WEF notes these case studies are not presented as
universal solutions but as “practical examples that
have helped to advance responsible mineral
development in specific circumstances”. The Swiss
body acknowledges there are many other possible
actions, case studies and initiatives besides, and each
needs to be seen in the context of its application.
Mineral Development Agreements
RMDI began with an emphasis on the Mineral
Development Agreements (MDAs) often used in
developing countries, but quickly broadened its scope
to address conditions in all countries.
WEF recognised that the issues and challenges
identified in Phase I of the RMDI occur in all sorts of
countries and under a variety of legal and regulatory
regimes. WEF says “these different regimes, as well as
differences in cultural and historical traditions, can
play an important part in defining both challenges and
the most appropriate response”.
MDAs present unique challenges. The need to use
them arises most where significant constraints exist
on the ability of host-country governments to manage
their mining sectors in an efficient, accountable way.
Following its series of consultations, WEF reports
that many stakeholders thought the use of MDAs
could be better, and should, where possible, give way
to generally applicable legal and regulatory structures.
A good, stable, well-developed legal and regulatory
system is a significant step in the direction of an
attractive, sustainable investment and development
environment. But even the best mining legislation has
to be backed by honest, efficient policing and an
effective court system if its aims are to be fulfilled.
Factors that can lead to an investor demanding the
use of an MDA before making a significant investment
in a county can include:
• An underdeveloped or highly volatile legal and
regulatory regime governing mineral development,
taxes and royalties, capital flows, employment,
imports and exports etc.
• Inadequate capacity and experience of government
officials at the national, regional and local levels.
• Widespread corruption and the absence of the rule
of law.
February 2012
• An underdeveloped or corrupt judicial system that
cannot be relied upon to fairly and effectively
resolve disputes.
Because of these concerns, MDAs are used in
many countries. WEF research shows MDAs are in
over 75% of the 30 leading mining countries. MDAs
can be differentiated in terms of their scope:
• Simple – focus on financial and fiscal terms only
• More complex – encompassing broader development
aspects.
Phase I of the RMDI identified a number of
limitations in current agreements. Many stakeholders,
including industry representatives, expressed
concerns about asymmetrical bargaining power.
Others cited an absence of transparency and the risk
that some groups might feel excluded, with both
negotiation processes and final agreements difficult to
access. This, in turn, says the WEF report, creates the
worry expressed by stakeholders at sub-national and
community levels who felt excluded from the
negotiation of key provisions that affect them directly.
WEF says representatives of industry and civil
society commented that many MDAs attempt to
address too many complex topics too early in the
process, before there is a sufficient and shared
understanding of potential benefits, costs, effects and
issues. Industry representatives expressed frustration
over attempts to reopen or axe deals occurring after
companies had already invested heavily in a project.
“The need to
use MDAs
arises most
where
significant
constraints
exist on the
ability of
host-country
governments
to manage
their mining
sectors in an
efficient,
accountable
way”
EGD:TSX-V
EXPLORATION SPECIAL
At the same time, many stakeholders believe that
MDAs have untapped potential. They can clearly
define the rights, roles and responsibilities of all stakeholders,
thereby promoting constructive long-term
relationships and consensus on a project’s contributions
to local social and economic development. They
could also be vehicles for implementing the types of
processes outlined in the WEF report.
WEF concludes that there is a case for keeping
MDAs simple. They can supply the stability guarantees
that companies need before making a major capital
investment, and define the roles and responsibilities
of the key stakeholders. Partnerships and agreements
between smaller groups of actors can complement
formal MDA structures.
There is no single ideal model MDA. The best
structure is likely to vary from country to country,
and community to community, responding to
individual circumstances according to domestic
legislation, public sector capacity, the population
affected and other local conditions.
WEF says the aim must be to create national
environments that are transparent, inclusive and
trusting. Given this context, a country can hope to
develop a stable, well-developed legal and regulatory
system and investment climate. Where this applies,
investors may be less likely to see MDAs as necessary
to securing their interests. In its report, WEF
expresses the hope is the recommendations “can help
to advance countries and communities towards that
transparent, inclusive and trusting environment”.
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CALL: +44 192 665 0376 Europe + 1 604 681 9501 North America
E: INFO@ENERGOLD.COM
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Mining Journal special publication – PDAC
33

Company profile
Moly Mines begins 2012
on the acquisition trail
Moly Mines, an ASX- and TSX-listed
resource company, moves into
2012 on the acquisition trail with a
successfully operating iron-ore mine,
cash in the bank, a strategic alliance
with the Chinese Development Bank and the support of
their major shareholder Hanlong.
At the Spinifex Ridge iron-ore mine, Moly Mines is
currently mining four areas of iron-ore mineralisation
identified within the mining leases granted and
acquired for the Spinifex Ridge molybdenum project.
They are known as Auton, Auton North East, Dalek and
Gallifrey (Iron Ore Project), and are located 500m to the
east of the Spinifex Ridge molybdenum-copper
resource.
Production began in late 2010 with an expected
annual production rate of 0.8-1Mt/y. It achieved
1Mt of ore mined and crushed for the calendar year
in December 2011 and the mine celebrated the sale of
the one millionth tonne of iron ore, which was achieved
within 12 months of first shipment.
The Spinifex Ridge iron-ore mine has outperformed
all expectations during the year, with production
exceeding the budget outlook and sales of $121 million
for the year.
The Spinifex Ridge molybdenum project, located on
the same mining leases as the Spinifex Ridge iron-ore
mine, is development-ready with all environmental
approvals received. In December 2011, Moly Mines
reported that the project would be put on hold due to
the continued weakness of global molybdenum prices
and the strength of the Australian dollar that rendered
the project sub-economic for the time being.
Moly Mines is embarking on a new corporate
direction following the signing in December 2011
of a Memorandum of Understanding with China
Development Bank Corporation (CDB) which has
www.molymines.com
established a Strategic Alliance between the two
organisations for the financing of new mining projects
identified and introduced by Moly Mines.
Under the Strategic Alliance, CDB will consider
providing financial support (including loans) for new
mining projects on terms with a similar commercial
effect to CDB as those set out in the US$454 million
Syndicated Facility Agreement for the molybdenum
project with CDB.
The company’s major shareholder, Hanlong Mining
Investment Pty Ltd ,will assist Moly Mines arrange new
debt facilities and provide credit support to enhance
the finance packages and minimise funding costs.
Moly Mines has a very strong technical team and is
currently looking at a variety of near-term development
projects, which include iron ore, specialty and ferrous
metals.
CONTACT
Moly Mines Limited
Principal & Registered Office:
Perth
46-50 Kings Park Road
West Perth WA
6005
PO Box 8215
Subiaco East, WA
6008
Tel: 08 9429 3300 Fax: 08 9429 3399
E-mail: info@molymines.com
Toronto – Canada
PO Box 78023 784 Taunton Rd. E.
Oshawa, ON
L1H 7K0
Canada
Tel: +1 416 777 1801
or: +1 416 371 7541

Metals markets poised
Exploration is driven, ultimately, by metals prices,
or at least the expectation of them
THE World Economic Forum
(WEF) recently published a frightening
report on the risks faced by the
global community during the next
ten years.
In its seventh Global Risks report, WEF presented
what it describes as a ‘snapshot’ of how 469 industry
leaders and experts perceive the evolving, interconnected,
risks that cut across society, the economy,
the environment, geopolitics and technology.
Chronic fiscal imbalances and severe income
disparity are the risks seen as most prevalent over the
next decade. Acting in tandem, these risks threaten
global growth as they are drivers of nationalism,
populism and protectionism at a time when the world
remains vulnerable to systemic financial shocks, as well
as possible food and water crises.
WEF’s Risk Response Network, and its four
partners (Marsh & McLennan, Swiss Reinsurance,
Wharton Center for Risk Management and Zurich
Financial Services) concluded that there were three
distinct ‘constellations’ of risk that present a “very
serious threat to our future prosperity and security”.
The first, entitled ‘Seeds of dystopia’, is the risk
associated with a world where a large youth
population contends with chronic levels of unemployment
while a large population of retirees becomes
increasingly dependent on heavily indebted
governments.
The second constellation of risk, entitled ‘How safe
are our safeguards?’, is linked to a diminishing capacity
to manage the systems that underpin our prosperity
and safety.
Third, entitled ‘The dark side of connectivity’,
reflects fears of an increase in virtual crime, with daily
life becoming more vulnerable to cyber threats and
digital disruption.
Deloitte has also recently published an annual
report on global trends in the resources sector.
The financial services company’s global mining
leader, Philip Hopwood, noted: “It could be argued
that the burning issues facing the mining industry tend
to remain largely unchanged over time. While this
may be factually correct, it fails to take into account
the extent to which shifting social, economic and
political trends affect the sector.
February 2012
“Looked at in isolation, each challenge may seem
familiar. Looked at through a macroeconomic and
geopolitical lens, however, it becomes clear that the
difficulties afflicting the industry are rapidly reaching
an unprecedented level of extremity.”
Deloitte’s ‘Tracking the trends’ report lists the ten
most important trends. Cost inflation is not new, but
it is higher. Changes to fiscal and government policy
have been occurring for years, but their volume,
unpredictability and associated costs are on the rise.
Commodity price volatility is now greater than
EXPLORATION SPECIAL
Marius Kloppers: BHP
Billiton expects copper
and iron ore to remain
supported by their
compelling supplydemand
fundamentals
ever, driven in part by market uncertainty and the
unparalleled demands of Asian governments and
consumers.
Issues around sustainability, the environment and
human rights have escalated into more frequent
episodes of community activism and social unrest.
Labour shortages continue to mount. Corporate cash
holdings have risen, resulting in spiralling shareholder
expectations. Capital project portfolios are bulking
up. And through it all, the regulatory environment
continues to tighten.
We see an additional 100,000
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Mining Journal special publication – PDAC
35

SIKA spurs on
gold prospects
in Tanzania
SIKA Resources is a Canadian junior
exploration company focused on Tanzanian
gold. Established in 1996, the company has
extensive public company experience, as well
as excellent contacts and relationships
throughout Tanzania and elsewhere across Africa.
Management has hands-on experience in taking private
companies public and is committed to creating value by
fast-tracking prospective gold projects that show
superior potential for further development.
SIKA’s portfolio of gold projects consists of four gold
projects in the heart of Lake Victoria Goldfields,
Tanzania. All four properties lies close to major
operating gold mines and significant known gold
deposits, and all are located within the regional
structural corridor that hosts many of the major gold
deposits in the Lake Victoria Goldfields area.
Tanzania is one of Africa’s most stable, miningfriendly
countries, featuring a progressive and
Company profile
Map showing
the location of
SIKA properties
in Tanzania
western-orientated political system. Some salient
features of the properties are as follows:
• Geological features documented on all properties are
consistent with those seen at many of the producing
gold mines in the area;
• All the properties are readily accessible and within
driving distance of the main cities in the region, where
all necessary labour, supplies and services may be
found;
• All four properties are 100% owned by SIKA, with no
royalties or other obligations outstanding aside from
those due to the Tanzanian government itself.
• Several major multinational gold-mining companies
have made significant investments in Tanzania and are
operating in the area, including Anglogold Ashanti
(Geita mine – 33Moz in resource and reserve), African
Barrick (Bulyanhulu mine – 15+Moz; Buzwagi mine
– 2+Moz; Tulawaka mine – 1+Moz ), and Resolute
Mining (Golden Pride – 2.6Moz ).
A brief description of the four properties follows:
Ntundu gold property
• Some 42.6 sq km are located in the Siga Hills
greenstone belt (part of the Kahama greenstone belt);
• Immediately east of the Jubilee Reef gold mine, a past
gold producer, and immediately south of an active
artisanal gold mining camp;
• 40km south of Bulyanhulu gold mine;
• 30km north of Buzwagi gold mine;
• Lies along the eastern edge of the Kahama greenstone
belt, which is host to both the Bulyanhulu and Geita
gold deposits, and within a northeast-southwest
structural trend that hosts the Geita, Bulyanhulu,
Buzwagi and Golden Pride gold mines.
www.sikaresources.com
Iselenge gold property
• 12.3 sq km located 60km west
of the Golden Pride mine at
the west edge of the Nzega
greenstone belt;
• Active artisanal gold workings
just 1km east of the property;
• Lies along the eastern edge of
the Kahama greenstone belt,
host to both the Bulyanhulu and Geita gold deposits.
Shibiso-Igwema gold properties
• Two contiguous properties totalling 132sq km;
• Hosted in granitic terrain with slivers of greenstone
and banded iron formation similar to the Buzwagi gold
mine, which is less than 25km north;
• The properties also lie along the eastern edge of the
Kahama greenstone belt, host to both the Bulyanhulu
and Geita gold deposits.
SIKA will continue to focus on the acquisition of gold
properties that are geologically similar and
geographically proximal to significant gold deposits
and producing mines, then advancing them quickly,
efficiently and effectively, mindful of the communities
and natural surroundings of the areas
within which the properties are
located. For additional information,
please visit the SIKA website shown
below.
CONTACT
Sika Resources
Kim Harris, President and CEO
CEO Direct Line: + 1 416 447 6882
Fax: + 1 416 447 9950
E-mail: info@sikaresources.com

Price predictions
With a shorter time frame, Xstrata plc, BHP Billiton
and Glencore International plc made predictions in
their annual statements for 2011 on the likely
direction of commodity prices.
For its part, Xstrata was very optimistic for metals
markets, and voted with its wallet by investing
US$30 billion in sustaining, or expanding, its
operations and building new mines or metallurgical
facilities.
BHPB’s chief executive, Marius Kloppers, said that,
over the longer term, “we remain positive on the
outlook for the global economy as the drivers of
urbanisation and industrialisation in
China, India and other emerging
economies are expected to
underpin global growth and robust
commodities demand”.
Mr Kloppers added: “Of the
commodities, copper and iron ore
are expected to remain supported by
their compelling supply-demand
fundamentals, while the structural
shift in Chinese demand for
metallurgical coal remains well
entrenched. Geopolitical factors are
once again likely to influence crude-oil
pricing.”
In contrast, BHPB believes the
outlook for aluminium, nickel and
manganese alloy industries remains
“challenging”, which, Mr Kloppers said, has led to a
“significant margin compression for most producers,
almost irrespective of their position on various global
cost curves”.
In its trading statement for the year, Glencore
noted that this year “has started well across all areas
of our business”. The trading group noted “much of
the market weakness experienced towards the end of
the year has reversed, and market volumes remain
healthy”.
Precious demand
Precious metals look particularly robust, and the
global demand for gold rose to over 4,067t, worth
US$205.5 billion, in 2011 – the highest amount in 14
years. This is the first time that global demand has
topped US$200 billion, and the tonnage level is the
highest since 1997.
The increase was driven by record interest from
investors, according to the latest ‘Gold Trends’
report from the World Gold Council (WGC).
Investment demand was up 5%, to almost 1,641t, as
buyers in Europe, China and India looked for safe
assets during a period of economic uncertainty.
China and India are the main cultural consumers of
gold, generating 55% of global jewellery demand and
49% of overall demand, said the WGC. Europe also
witnessed an increase in demand. The continent
posted its seventh consecutive annual gain, to 375t,
with Germany and Switzerland the main drivers of
growth.
China’s jewellery demand increased every quarter
of last year, and was the largest single jewellery
market worldwide for the second half of 2011. WGC
expects demand in China to continue steadily rising.
India remains the largest country for gold demand,
with 933t. Indian demand accounted for a quarter of
total bar and coin demand worldwide, despite the
February 2012
weakness of the Indian rupee
against the US dollar during
the second half of 2011.
On the supply side,
gold-mine production
reached an annual record of
2,810t, 4% up on 2010.
Recycling was down 2%
year-on-year to 1,612t. When average price
rises of 28% are taken into account, this indicates that
near-market supplies are drying up and that
consumers may be holding on to their gold in the
expectation of higher prices.
Marcus Grubb, managing director of WGC’s
investments, said: “What we
can see from these 2011 figures
is that there were two main
factors driving the results:
Asian growth and optimism on
the one hand, and western
desire to protect assets against
uncertainty on the other.”
He added, looking
particularly at Asia, that there
was a major boost to the
overall figures from the
increase in Chinese demand,
which is a trend that will
continue over the current year.
Mr Grubb said: “It is likely that China will emerge as
the largest gold market in the world for the first time
in 2012. What is certain is that the long-term
fundamentals for gold remain strong, with a diverse
and growing demand base, coupled with constrained
supply side activity.”
WGC’s research shows that central banks
continue the trend established in 2010 of being net
buyers of gold. Purchases by central banks soared
from 77.0t to 439.7t. This reflected the need to
diversify assets, reduce reliance on one or
two foreign currencies, rebalance reserves and
ultimately protect national wealth.
Gold support
This enthusiasm is shared by most analysts, and
reports published by Thomson Reuters GFMS, the
CPM Group and PricewaterhouseCoopers all
“Indian demand
accounted for a quarter
of total bar and coin
demand worldwide,
despite the weakness of
the Indian rupee against
the US dollar during the
second half of 2011”
EXPLORATION SPECIAL
indicated that strong gold prices would continue,
possibly breaching US$2,000/oz toward the end of
the year. CPM said that gains would subsequently
slow, with 2012 prices unlikely to be exceeded for
some years.
The updated annual Thomson Reuters GFMS Gold
Survey concluded that gold prices may remain stable
over the first half of 2012, as concerns about the
Eurozone moderate investment. The report forecast
an average price of US$1,640/oz for the six months
to end-June. However, the report argued that raised
expectations for inflation, prevailing low interest
rates, and a reluctance to invest in reserve currencies
may push prices over the US$2,000/oz mark by late
2012 or early 2013.
Philip Klapwijk, head of
metals analytics at GFMS, said
“The re-emergence of US
concerns, in particular any
apparent need to adopt [a
third round of quantitative
easing], could really fire up
the gold market.”
The GFMS results were
supported by responses
to the 2012 Gold Price
Report from PricewaterhouseCoopers
(PwC), which
analysed the views of
producers representing a forecasted 37.75Moz of
gold production for the coming year.
Fully 80% of respondents to the PwC survey
believed that the price would continue to rise, with
over half expecting it to hit US$2,000/oz this year.
Analysts at Credit Suisse AG sounded a more
cautious note, however, saying that while gold may
break records again, prices were unlikely to reach
US$2,000/oz in 2012.
The PwC survey noted the increasing disparity
between gold prices and stocks, comparing an
increase in prices of over 23% with a gain of under 4%
in the S&P/TSX Global Gold Index between January
and November 2011. PwC attributed this disjuncture
to the increasing popularity of electronically-traded
gold funds.
New York-based CPM group released its Gold
Long-Term Outlook report in January, arguing that
Mining Journal special publication – PDAC
37

38
EXPLORATION SPECIAL
the coming decade would continue to bring record
prices. However, the report concluded that there
would be a reduction in the rate of increase, with
2012 prices unlikely to be surpassed for some years.
CPM predicted that investors would become
increasingly acclimatised to the systemic uncertainties
which have underpinned a move towards gold,
and would increasingly seek lower prices while
maintaining demand. The report said that mine
supply was likely to grow steadily over the coming
decade, alongside a reduction in secondary gold
sources.
Base metals uncertain
Base-metals prices enjoyed a relatively stable final
three months of 2011 following the significant market
weakness experienced in August and September.
With base metals falling for much of the second
half of 2011, the closing prices for the year were
lower than the annual average figure. Nevertheless,
the average prices for copper, nickel, zinc and
aluminium last year were higher than the average
figures achieved for the four metals in 2010.
Copper was one of the hardest-hit metals by the
market turbulence in early August and then again in
September last year. The three-month price of
copper fell from US$9,800/t to almost US$6,800/t in
just two months. The metal has since recovered
somewhat and closed the year at US$7,600/t for an
average 2011 price (LME cash traded daily close) of
US$8,818/t.
Mining Journal special publication – PDAC
Nickel also suffered last August and September,
falling from US$24,500/t, and traded sideways for the
last three months of the year. The metal closed 2011
at US$18,710/t, for a 12-month average of
US$22,884/t.
Zinc reached US$2,500/t last July but closed the
year at US$1,845/t, for a 2011 average of US$2,205/t.
Aluminium broke above US$2,600/t briefly in late
July 2011, but drifted lower for much of the last six
months. The metal closed the year at US$2,020/t for
an annual average of US$2,403/t.
The average prices in 2010 for copper were
US$7,527/t (US$5,163/t in 2009), nickel averaged
US$21,801/t (US$14,700/t), with zinc on US$2,158/t
(US$1,658/t) and aluminium US$2,172/t (US$1,667/t).
Looking ahead, RBC Capital Markets has forecast
“a modest correction” this year in the price of copper,
which is nevertheless the bank’s preferred metal.
In a commodity report published at the end of
January, RBC forecast that refined copper production
had grown by a global 4.7% in 2011 following the 4.2%
rise in 2010. The bank expects supply of the metal to
grow 8.1% this year, 3.6% in 2013 and 4.8% in 2014.
In 2015, RBC forecasts a growth of only 3.0% due
to a shortage of ore supplies from mines, where
capacity remains the bottleneck.
Global copper demand is expected to have grown
3.6% in 2011. Demand in the West was stagnant, but
there was a 9.7% rise in China. RBC forecasts global
demand growth of 5.5% in 2012, 5.6% in 2013, and
4.0% in each of 2014 and 2015.
“Activity
from the
majors last
year was
dominated
by BHP
Billiton’s
move into
US oil/shale
gas with its
US$11.8
billion
acquisition
of
Petrohawk
Energy”
RBC estimated that the market was in a deficit in
2011, although reported inventory changes suggest a
balanced market. The bank expects inventories to
increase modestly in 2012, and then to decline,
supporting historically strong pricing.
Although RBC warns of “a significant downside
price risk in the event of a global economic
downturn”, the bank is forecasting an average price of
US$3.50/lb this year, US$4.00/lb in 2013, US$4.25/lb
in 2014 and US$4.50/lb in 2015.
Corporate activity
Looking at the corporate picture, Ernst & Young
expects merger and takeover activity in the mining
and metals sector to pick up in 2012.
In a report, E&Y said: “Robust demand fundamentals,
strong balance sheets and an appetite for
growth will drive a step-up in M&A in the global
mining and metals sector in 2012.
“The uncertainty and volatility is likely to continue
through 2012, but mining and metals companies have
an appetite for growth and are increasingly unwilling
to stall their growth plans.”
Meanwhile, the total value of completed deals
jumped 43% in 2011 from the previous year to
US$162.4 billion, yet volumes fell 10% to 1,008,
highlighting the difficulty in evaluating, financing and
executing deals at the junior end of the market, the
report said.
Activity from the majors last year was dominated
by BHP Billiton’s move into US oil/shale gas with its
US$11.8 billion acquisition of Petrohawk Energy.
The report said: “Outside of these deals, the majors’
M&A activity focused on opportunistic acquisitions,
rounding out minority holdings and divesting
non-core or higher-cost businesses, as well as
returning cash to shareholders.”
In deal-value terms, coal became the most targeted
commodity during 2011, accounting for over
US$41.4 billion of the total, while gold was top in
volume terms with 385 deals completed. Ernst &
Young expected to see more activity this year in
steel, a sector that remains more fragmented than
other metals and looks poised for further consolidation,
and possible M&A in the potash sector.
The report added: “We also expect to see
increased deal activity in select commodity assets –
such as gold to take advantage of the valuation
premiums, copper to secure supply, and coal to meet
huge demand from India and China.”
Geographically, E&Y expected to see focus shift
back toward investment in emerging and frontier
countries (such as Mozambique, Zambia and
Mongolia) as risk appetites increase. The report
warned that deal execution was becoming tougher,
the risks greater and valuations more complex.
The company also said that proceeds from initial
public offerings (IPOs), excluding Glencore, dropped
59% versus 2010 with a record number of IPOs
postponed. Glencore’s US$10 billion IPO last May
accounted for almost 60% of the proceeds raised by
the sector.
The report said: “Beyond the junior listings, a
record number of IPOs were postponed in 2011
and there is a strong pipeline of companies that
will ‘pounce’ when there is a sustained period
of confidence and stability in equity markets.
“If markets stabilise, this may happen in the second
half of 2012.”
February 2012

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