chamber of mines news briefs – week of september 27, 2010...implemented in 2011 after...

Chamber News Briefs 1

Chamber of Mines News Briefs – September 19 - 23, 2013

[Note: News headlines are hyperlinked to their stories in this document.]

Nunavut News ............................................................................................................................................... 1 Airport takes on Nunavut flights ............................................................................................................... 1 Legislative Assembly briefs ....................................................................................................................... 2

Resource Development and Energy News .................................................................................................... 4 North America's Forgotten Frontier: Canadian Arctic .............................................................................. 4 Where have all the mining towns gone .................................................................................................... 5 Quebec mining Bill to hurt investment – QMEA ....................................................................................... 9 Yukon to consult First Nation over mining claims .................................................................................. 10 Supreme Court will not hear case about mining rights in the Yukon ..................................................... 10 Canadian Zinc wins final permit to operate Prairie Creek Mine ............................................................. 10 Mining News Nuggets ............................................................................................................................. 11 Yukon prospectors unhappy with ruling on mineral staking .................................................................. 13 We now have a clear direction from the Supreme Court’ ...................................................................... 13 Canadian uranium sector prepares for rising tide .................................................................................. 16 Canadian exchanges push to relax private placement rules................................................................... 18

NUNAVUT NEWS

Airport takes on Nunavut flights

Cambridge Times – September 17, 2013

Melissa Murray

WATERLOO REGION – Starting Thursday, as many as four weekly flights will lift off from the Waterloo Region’s airport en route to Nunavut.

Regional council approved a contract with Nolinor Aviation last week that will allow the airline to operate regular charter service of cargo and personnel for a Toronto-based mining corporation to the Qikiqtani Region in Nunavut on Baffin Island.

It’s expected to bring about $400,000 in revenue from passenger processing fees, fuel surcharges, aircraft parking, landing fees and vehicle fees.

It is expected that at least two flights will leave from the airport each week.

The agreement also allows Nolinor, based out of Montreal, to use the terminal for screening of passengers and cargo.

Coun. Jim Wideman, who chairs the planning and works committee meeting, praised the agreement as a “good news story” for the region.

“It will simply get more bodies through the airport and will spark a neat wave of travel,” he said.

The region is trying to promote its airport so it can stand alone and be profitable.

“Four hundred thousand dollars a year is $400,000 closer to making a profit,” Wideman said following the meeting.

The company will fly the Boeing 737-200-series aircraft round trip, stopping in Iqaluit for fuel before continuing on to Baffin Island and repeating the trip, taking a total of 11 hours.


According to Nunatsiaq online, the mining project that’s the destination for the employees and cargo has been identified as the Baffinland Iron Mines Corp’s Mary River iron mine.

Chris Wood, Waterloo Regional Airport general manager, said the agreement is fantastic news for the airport and community.

“I think this is just the beginning. I think this is going to ramp up and it’s going to have some good spin-off,” he said.

Since Boeing will be based in the region, Wood said the airline is going to want to keep busy, which could mean additional flights and revenue.

“Airlines don’t like to have their airplanes sit on the ground. They don’t make any money sitting on the ground. I think everyone is going to try to keep that airplane flying as much as we can. It’s good for the airline, it’s good for us, it’s good for the local community.”

The airplane is a “combi”, so it can have passengers and cargo on the same flight.

The maximum number of passengers the flight can hold is 119, but Wood says initial talks indicate between 59 and 77 people will be on each flight and the rest of the space will be used for cargo.

Wood said he was introduced the idea of offering the flights out of the airport a couple of years ago, but it was just a few months ago when discussions really started to take off.

“They like the area, they like the airport, they like the ease for which we make things possible for them. I think they like the large population and the access of talent as well. They are eventually going to need to hire some people to work in this mine,” he said.

Airline officials have already looked at renting apartments for flight crews and are working to find a caterer for in-flight meals.

“They’ve already hired some companies to do the cargo handling and the fuelling and the security stuff here in the terminal building before they get on the flight,” Wood said.

The agreement is for one year.

Legislative Assembly briefs

MLAs ponder election run

Nunavut News/North – September 23, 2013

Myles Dolphin and Miranda Scotland The territorial election is only a month away and most Nunavut MLAs have announced their intentions for re-election.

The new electoral boundaries, featured in Bill 22 - the Act Respecting Constituencies of Nunavut - were implemented in 2011 after recommendations made by the Nunavut Electoral Boundaries Commission.

Under the new map, the number of constituencies will rise to 22 from the previous 19.

Arviat, Iglulik and Iqaluit will each get an additional MLA.

Repulse Bay and Coral Harbour will be paired together in a constituency while Kugaaruk and Taloyoak will make up another one.

Gjoa Haven will now have its own MLA, as will Hall Beach.

Whale Cove, previously with Rankin Inlet South, will now be grouped with Arviat North while Rankin Inlet North will be paired with Chesterfield Inlet.

In the Kitikmeot region, Kugluktuk MLA Peter Taptuna will be running for re-election, but Akulliq MLA John Ningark announced he will not. Cambridge Bay MLA Keith Peterson and Nattilik MLA Jeannie Ugyuk are still on the fence.


In the Kivalliq region, Rankin Inlet South-Whale Cove MLA Lorne Kusugak and Nanulik MLA Johnny Ningeongan are running again, while Arviat MLA Daniel Shewchuk, Baker Lake MLA Moses Aupaluktuq and Rankin Inlet North MLA Tagak Curley are not.

In the Qikiqtaaluk region, Quttiktuq MLA Ron Elliott, Pangnirtung MLA Hezakiah Oshutapik, Tununiq MLA Joe Enook and Hudson Bay MLA Allan Rumbolt are running.

Iqaluit West MLA Monica Ell and Iqaluit East MLA Eva Aariak will be running again, but not Uqqummiut MLA James Arreak nor Amittuq MLA Louis Tapardjuk.

South Baffin MLA Fred Schell and Iqaluit Centre MLA Hunter Tootoo were still uncertain at the time of publication.

Plan for new health centre in Cape Dorset going ahead

Plans to replace Cape Dorset's aging health centre are still going ahead, according to the health minister.

The project is currently in the planning process and no set date has been determined for when construction will start, said Keith Peterson in answer to a question asked by MLA Fred Schell in the legislative assembly on Sept. 16.

Schell was wondering why the project had not been marked as ongoing like the health centre projects for Arctic Bay, Repulse Bay and Taloyoak.

Peterson said he expects funding will be identified in next year's capital estimates so the planning can continue.

Cape Dorset's health centre was built in 1983 and is one of the oldest health centres in Nunavut, noted Schell.

"(It) is facing some serious issues due to aging, especially with respect to code upgrades, ventilation problems, and overcrowding of programs," he said.

Materials sent to wrong community

Hudson Bay MLA Allan Rumbolt announced work has finally begun to replace boilers and sewage lines at the Nuiyak School in his community.

Speaking to the minister for Community and Government Services, Lorne Kusugak, Rumbolt asked why the work was underway when the school year has just begun. He also wondered about the delay in construction, as the material had been in the hamlet for the past year.

Kusugak replied the material had accidentally been shipped to Qikiqtarjuaq, and only recently made it to Sanikiluaq.

MLA wants airport designated as 'hub'

Tununiq MLA Joe Enook wants his community, Pond Inlet, to be designated as the territory's fourth 'hub' airport after Iqaluit, Rankin Inlet and Cambridge Bay.

Enook said the community is located within an hour's flying time from a half dozen other communities and its proximity to the Mary River project "makes it a strategic choice for being designated as North Baffin's hub airport," he said on Sept. 17.

Minister for the Department of Economic Development and Transportation, Peter Taptuna, said the government does not designate communities as hub airports or not.

"Everything depends on economic activity of the community," Taptuna replied.

"If it warrants that a community becomes a hub, it's up to the airlines and it's up to the industry."


In his follow-up question to the minister, Enook said it was important to act now to expand capacity and modernize facilities at the Pond Inlet airport in order to accommodate the large-scale development that will take place in the North.

Taptuna said his understanding is that the users of the Mary River mine plan to fly in and out of the site using their own infrastructure.

Concerns over cruise ships

Nanulik MLA Johnny Ningeongan is concerned about the effect cruise ships are having on Nunavut's wildlife and environment.

Community members, he said, have reported seeing ships disrupting walrus found around Walrus Island and Coats Island.

"These areas are very important to us," stated Ningeongan in the legislative assembly on Sept. 16.

Ningeongan said he wants more done to notify communities of visiting cruise ships and also wondered if measures could be taken to control interactions between tourists and the environment.

He asked Economic Development and Transportation Minister Peter Taptuna to work with the departments of Environment and Fisheries and Oceans to address this issue.

Taptuna said he would talk to his staff about communicating better with Nunavut Tourism.

However, he acknowledged that in the future there may be an issue with cruise ships hindering community harvesters.

"It's just a matter of better co-ordinating with Nunavut Tourism and Canada Border Services Agency to make sure that the routes are made known to the communities that are involved in walrus hunting and other marine mammal harvesting," he said.

Youth advocate to be hired

Commissioner Edna Elias gave assent to the Child and Youth Representative Act Sept. 17 in the legislative assembly.

Under Bill 40, an advocate will be hired as a voice for youth.

This person will be independent of the government.

"The representative for children and youth will be our watchdog to ensure that our most vulnerable children and youth get the service they need and deserve," Premier Eva Aariak explained in the legislative assembly on Sept. 16.

This person will be tasked with identifying ways to improve services for children and youth, reviewing legislation pertaining to youth, submitting an annual report to MLAs with recommendations and findings, and ensuring youth voices are heard and considered in matters of government.

RESOURCE DEVELOPMENT AND ENERGY NEWS

North America's Forgotten Frontier: Canadian Arctic

National Post – September 18, 2013

Diane Francis

YELLOWKNIFE, NORTHWEST TERRITORIES -- This charming lakeside town bustles as thousands of Japanese tourists come annually to view the spectacular Aurora Borealis lights and as workers in mining, construction and energy arrive to cash in on its boom.


I was invited to speak at the Prospects North 2013 conference sponsored by the NWT Chamber of Commerce and I also visited the Diavik Diamond mine, the biggest of three gigantic mines nearly 400 miles north of Yellowknife. These mines, and another to open soon, are why the Northwest Territories has become the third biggest diamond producer in the world.

The conference was organized by executive director Mike Bradshaw and well-attended by policy, political and business leaders. My message was simply that the territories needed a new metaphor. They are not isolated and helpless political jurisdictions. They must think of themselves as the world's biggest mining and resource play.

The three -- NWT, Yukon and Nunavut -- are bigger than Australia and have only seven operating mines now. Another 20 mines are in advanced stages of pre-development approvals and hundreds more undiscovered ore bodies exist in the frozen north. Such mature projects and exploration must be their top priority -- as the world's biggest mining play -- and will usher in an unprecedented amount of prosperity and the building of essential infrastructure.

"BY 2020, our GDP will double and we will have several new mines, one diamond, two gold mines, one zinc mine and two lead-zinc mines," said NWT Premier Robert McLeod in his office in Yellowknife. Imagine what twice that many mines would mean to the Territory and the North.

His prediction doesn't include the economic development that will result from a discovery of oil from shale and the huge hydro-electric potential in the Northwest Territories, bigger than Quebec's James Bay or B.C. Hydro's. The oil, light and valuable, can be developed within a few years -- like the Bakken in North Dakota and Saskatchewan -- but the development of dams may take a decade or more.

"We are told that the shale oil in our territories (near Norman Wells) is gigantic, 627 million barrels or even more," said Peter Vician, Deputy Minister of Industry Trade and Investment in an interview.

The world has passed this northern frontier by -- from a failed attempt (for 30 years) to exploit natural gas and oil in and around Inuvik, to the lack of infrastructure or interest by the federal government (which is the landlord).

Canada's North is unexplored, unmapped and undeveloped making Canada itself a laggard in terms of economic development. The territories are cold and remote and unpopulated but so are Alaska and Siberia and yet jurisdictions are massively wealthy and have large populations and infrastructure.

Siberia has 50 seaports, more people than Canada, 36 million and seven cities with half a million or more people. The area was opened up in 1891.

Alaska, one third size of Canada's Arctic, has seven times' more people (710,000), a $50 billion Heritage Fund, seven huge operating mines, Prudhoe Bay oil fields and pipeline and 25 seaports.

Meanwhile in Canada in the 1980s one of the most promising oil wells was discovered -- the Amauligak in the Beaufort Sea -- then capped and abandoned along with trillions of cubic feet of natural gas.

Hopefully, the territories will speak with one voice in Ottawa and the promising shale oil discoveries will make the country and world take notice.

Maybe this generation will belong to the North.

Where have all the mining towns gone

They’re toxic and deserted wastelands – but to those who once lived there, the remains of mining communities are worth holding onto.

Up Here - September 2013

Ashleigh Gaul


In July Susan Mather packed her family into a motor home. She drove north from Calgary, four kilometres past Yellowknife, to a skeletal timber headframe so rickety that cranes can’t set demolition workers on top to assess just how rickety it is. At its base, a yellow-and black-painted board reads, “Giant Mines Yellowknife, Ltd. Last injury: May 1999.”

That was six months before the last gold brick was poured in Yellowknife, and three years after Mather left her first home. These days, when she wants to visit, she books in advance. A mine manager escorts the family through a line of buildings in various states of disrepair.

They’re given hardhats, safety glasses, reflective vests and a rundown of safety precautions, then asked to log in. When Susan fills out a single line on behalf of the whole family, her son Karl jokes, “This isn’t a guest book, mom, it’s a log. This is a worksite.”

Estimated to cost between $500 million and $1 billion, Giant Mine and the townsite it built to house its workers might be the single largest industrial cleanup in Canadian history. But Mather and her sister remember biking freely through Giant Mine on pipe boxes (plywood insulators for water and gas mains) waving to neighbours at work as they passed by. Sometimes they’d taste a bitter dust in the air that stayed in their mouths all day. Wandering through their old neighbourhood, Susan looks for her raspberry garden, while her sister finds the trees their dad planted and stayed long enough to watch grow. Karl, now 43, clambers up the hill to find the grave he dug for his dog in 1984. It’s still there.

They keep up with the news. They know there are 237,000 tons of uncontained arsenic beneath the houses where they once lived, and asbestos flaps freely from their boarded-up walls. But like hundreds of former mine town residents across the North, their memories of mining’s most disastrous mistakes also include company-sponsored baseball tournaments, barbecues, community centres, picnics and visits from Santa Claus. Many of the North’s major townsites were destroyed with their mother mines. But bound up with statistics on contamination and preposterous reclamation costs, there are rich histories and lessons learned that some say the government has overlooked on its quest to make things right. And those who lived there say there’s a culture worth preserving from mining’s dirty past. Mention the glory days of mining and most conjure the Klondike, when 100,000 overnight prospectors set up ramshackle tents along the Alaska-Yukon border in pursuit of fast gold. But to a generation of miners, many of whom are still working in the North, the golden age exists within our living memory, when whole families packed up everything and headed North, often for the first time, in a similar pursuit of a better life.

The Giant Mine townsite represents a transition between the mostly organic outpost camps of the Klondike and the manufactured town. From 1945 to 1953, Giant Mines Ltd. built 30 houses for its first fulltime workers and subsidized additions – porches, gardens, playhouses in the rock walls, a freestanding sauna in the birches beside the community beach. Shortly after came the Cold War, the question of Arctic sovereignty, and a renewed push for resource development with a concerted purpose – “the idea that Canada ought to move North,” says John Sandlos, a geography professor at Newfoundland’s Memorial University, who’s studying the effect of Northern mines on First Nations communities. “In other words, not to just have outposts, but to try and physically settle this area through resource development.” Right along with the DEW Line and the relocation of Inuit families from Northern Quebec to the High Arctic came another phenomenon: the creation of Northern suburbs, places like Uranium City in northern Saskatchewan, Tungsten, on the border of the Yukon and Northwest Territories, and Pine Point on the southern shore of Great Slave Lake.

They were dirty – green films of asbestos clung to clothes on the line, and heavy metals and acid leached into the lakes and rivers around them. But they were also comfortable, close-knit and sometimes surreally luxurious. They were some of the first Northern towns to have electricity, plumbing and sewage systems. They had the North’s first swimming pools. Pine Point, which had between 2,000 and


2,500 residents at its peak, had a municipal system, a mayor and a golf and country club. Each year, families were supplied with 20 kilograms of fertilizer to keep their lawns electric green, in spite of the boreal climate.

As communities, they were wildly successful, says Sandlos. “There was a powerful sense of solidarity and cultural identity among the people living in the towns,” he says. They shared common goals and a purpose, and however temporary, the possibility for development. “Overwhelmingly,” says Sandlos, “the experiences I saw at some of these towns was really, really positive. I’ve never heard people talk about loving to live in a place so much.”

Gordon Karaloff is looking for a rock, a memento – “A clump of lead crystals. When you smash them they shatter into a thousand heavy little shards.” He clambers up a small rubble mound where the crusher once stood at the Pine Point lead-zinc mine 90 kilometres east of Hay River, NWT. He takes a minute to find his bearings. The crusher was beside the mill, where he worked for a few summers mixing chemicals to separate ore bodies. Ahead, beyond a rock berm across a Martian landscape, the main tailings pond stretches to the shore of Great Slave Lake. There are bright blue ponds at the base of 48 open pits dotting the surrounding land.

Behind him lie the ruins of a very different scene. Nothing remains of the old townsite, rapidly erected in 1963 and torn down in 1988, but a serpentine network of cul-de-sacs and sidewalks. Speed bumps mark the old strip mall parking lot and a small hole in the ground leads into the hotel’s old cellar, where residents’ final supper bills pile up on the floor.

It’s early August in Pine Point. Twenty-five years after the mine closed and a whole municipality moved out, Karaloff, now in his 50s, and about 250 former residents are back in the old townsite. They park their RVs in the strip mall parking lots and the tree-covered foundations of their old houses. Miners aren’t generally known as a sentimental lot, but most cry when they get here. For many, it’s the first time back.

Over the weekend, they hold a fish fry, a family dance and a craft sale. They organize a small parade and march it down the overgrown streets. They remember the town’s last days, when the mayor hired consultants to make a case for why Pine Point didn’t need to be destroyed, how it could create a secondary economy. But Cominco, the mine’s owner, said it was losing profits fast and barely covered remediation costs – clearing the townsite and filling in the tailings pond. The houses were sold privately and moved out of the territory; the school and rec hall were donated to nearby towns like Fort Resolution, and the rest was demolished.

Pine Point marked a turning point for the Northern suburbs. Cominco bought a 30 percent stake in Polaris, Nunavut’s pioneering fly-in, fly-out mine. Mining towns had become too costly and too short-lived. They were also heartbreaking: They inevitably became ghost towns. Today, the very idea of a mining community is a relic of the past. Karaloff is stoic. “That’s history,” he says. Stooping down to pick up a piece of quartz – not lead, but it’ll do – he adds, “A glorious history.”

Mather, like Karaloff, looks for some memento of her life in the mining town. Before going into the Giant site, she stops at an unmarked, white tin building on the side of the road: Giant’s old food commissary. Inside, she meets Ryan Silke, a 31-year-old historian and the most active member of the NWT Mining Heritage Society.

He’s only met Mather once before, but Silke knows what date her family moved into town (1940), that Mather was the first baby born into the townsite in 1946, that she moved a few doors down at Giant with her first husband and moved out again after a workers strike turned violent and an explosion in B-shaft killed nine people in 1993. Silke has been documenting the human experience of mining in the NWT since he was 16. Today, he’s helping the NWT Mining Heritage Society build up a collection for a future mining museum.


As a hobby, Silke has hiked, canoed, snowmobiled and chartered bush planes into tens of mine sites and old camps, tagging machinery, surveying the land and assessing the state of some of the buildings and headframes left behind. Ironically, he says, his best finds have been in the leftover dumps of the Ptarmigan, Negus and Burwash sites around Yellowknife. He shows off a China teacup he pieced together from Ptarmigan and stores in a curio cabinet, across the room from a shelf of binders where he’s documented every site visit he’s conducted, along with hand-drawn maps, in pencil, since 1999. The commissary is packed with hardhats from all eras, baseball trophies, old magazines and a slew of other trinkets.

“It’s all part of the story on human activity and what people were doing at a certain time,” he says. “I don’t want just two hardhats, or slag pots. I want the whole evolution of them because there’s a story there of how our practices have evolved.”

The Mining Heritage Society also wants to save Giant’s old recreation centre for a museum and a few buildings to serve as an example of a typical mining town, but the city’s still deciding whether the arsenic permeating the soil below is too toxic. “And that’s the conundrum,” says Silke. “Are these contaminated sites or cultural sites?” He adds, “It seems like a lot of people just want to tear them down and forget.”

Tom Hoefer, executive director of the NWT and Nunavut Chamber of Mines, agrees. Having grown up at Con mine, Yellowknife’s other major gold deposit and demolished townsite, he regularly passes the site of his old house on the shores of Great Slave Lake. To look at Yellowknife, he says, no one would know it was a mining town. “There is a current attitude that these sites are blights on the landscape and so we have to get rid of them,” he says. “But that kind of approach, ‘Let’s erase them off the landscape and no one will ever know they were there,’ that denies history too. The fact is, as we take these apart, we lose something – part of our past. Do we care?”

In her living room in Igloolik, Nunavut, Nancy Amalualik traces out a map of Nanisivik from memory. She starts with the road that leads into town from the airport past the commissary and bar, and talks more as she gets closer to her own home. “When you walked inside for the first time,” she says, “there was a card on the table that said, ‘Welcome to Nanisivik,’ and everything was there – furniture, free food in the cafeteria, and Newfies brought over some dishes.”

Nanisivik, which operated from 1976 to 2002, was the site of Canada’s first Arctic mine and last big mining town. The townsite was truly science-fiction to Inuit and non-Inuit workers alike. While the surrounding communities made do with honeybuckets and CB radio, some Nanisivikers were experiencing flush toilets and telephones for the first time.

Of course, problems with the mining town rarely appear when the mine is operational, when lines of trucks stream out with ore and return with food and supplies. They come when a mine shuts down and the town dissolves as abruptly and unnaturally as it sprouted from its permafrost base. Amarualik remembers the day she learned she was leaving Nanisivik after 15 years there, working in the commissary kitchen. “The mine manager said, ‘The Inuit will go first and then five bosses.’ They were the last to leave.” The whole process took between two and three years.

Her return to Hall Beach, where she grew up, in 2002, was far less idyllic. Her children’s grades – A’s and B’s in French and English in Nanisivik – plummeted. Their Inuktitut was rusty. Amarualik’s common-law husband became depressed looking for nonexistent work, drank a lot and sometimes hit her. After three years in a women’s shelter in Iqaluit, Amarualik moved to Igloolik where she now lives with three cousins. She hasn’t seen her sons in seven years.

In Nunavut, as in the Yukon and NWT, mining’s new model resembles Meadowbank in Baker Lake, where workers fl y in from the nearby communities, southern Canada and sometimes overseas for two-week rotations. It’s less personal than a greeting card on the kitchen table, and some argue workers


don’t “buy in” to the North, either literally (taxes and spending revenues leave the North with the workers) or figuratively (many ex-mining town families remained in the North).

Perhaps the new model is less painful than abrupt evacuation. On the other hand, when Meadowbank experienced high turnover rates and absenteeism last year, it improved, in part, by adding in elements of a community – weekly square dances, a music room, traditional Inuit foods. Clearly, balancing human lives and industry is still a work in progress.

On her mantelpiece, Amarualik keeps a zinc rock about the size of a gumball, and a silver Thermos with a scratched decal that reads “NANISIVIK MINES.” There are other ex-Nanisivik workers in town but she says they don’t reminisce much. She doesn’t connect the mine’s closure with its aftermath. She only smiles and looks distant. “That was my home. It’s the only place I think of as my home.”

Quebec mining Bill to hurt investment – QMEA

Miningweekly.com – September 18, 2013

By: Henry Lazenby

TORONTO (miningeekly.com) – An analysis of Bill 43 of the Quebec Mining Act had concluded that, in its current form, the Bill would eventually reduce the ability of the mining industry to develop resources, create jobs and generate wealth for Quebecers, the Quebec Mining Exploration Association (QMEA) has said.

The association on Tuesday expressed surprise and concern during a Parliamentary committee presentation, saying it was clear that government demonstrated an “unfortunate” lack of understanding of how the industry and its business models worked, as well as of the challenges the industry faced.

“The Bill ignores the reality of mineral resource development in Quebec and seems to uphold a fictional vision of our practice on the ground," QMEA geologist and president Philippe Cloutier said.

The QMEA, which represents about 2 000 individual members and more than 250 corporate members in the province, said the new legislative framework included too many administrative and discretionary provisions, including the introduction of more than 70 separate provisions that were “arbitrary” and “disproportionate” in nature.

In an explanatory memorandum supporting its position, the association included a variety of provisions regarding the management of mining titles and new requirements imposed on operators, as well as provisions that would affect the development of the sector's stakeholders by rendering their business environment unpredictable.

The association did, however, unanimously support certain items in the Bill, such as paying 100% of financial guarantees to ensure future site remediation and assigning a proactive role to regional county municipalities in determining zones that are incompatible with mining activities, which partly reflected an agreement reached between the industry and the municipal sector.

The association urged the government to provide a transparent, predictable and stable legal framework to ensure the development of Quebec's mineral sector accorded with the province's economic interests.

"The proposed processes will make each step of a project dependent on the whims of the presiding Minister. Faced with so many random provisions, investments in our exploration projects will become illusory, since there will be little guarantee of being able to bring an interesting discovery to a viable operating project," QMEA general director Valérie Fillion said.

The association offered its full cooperation to government to make all improvements needed to align the Bill with the mining industry, as well as the realities of the geoscientific and economic environment.


Yukon to consult First Nation over mining claims

Supreme Court of Canada dismisses territory's appeal in Ross River case

Yukon court orders territory to consult First Nation

CBC News – September 19, 2013

The Yukon Government says it will comply with a court ruling ordering consultation with a First Nation before mining claims can be registered.

The Supreme Court of Canada dismissed the territory’s request to appeal a lower court decision that ordered government to change the way mining claims are registered on unsettled lands in Ross River Dena territory.

The Yukon Government says it will comply with a court ruling ordering consultation with Ross River Dena Council before mining claims can be registered.

That ruling said the government must consult with the Ross River Dena before registering certain mineral claims on land that might affect the First Nation's traditional rights.

Tom Ullyett of the Yukon Department of Justice said today's Supreme Court of Canada ruling puts a temporary freeze on staking in the Ross River region.

"We are now getting tooled up to comply with that part of that decision and the government will not allow any staking in that area until the proper consultation has occurred with [Ross River Dena Council]."

The court ruling is of major concern for Yukon mining interests but the Yukon Chamber of Mines president said he believes the impasse is temporary and accommodations can be worked out with the Ross River Dena Council.

Supreme Court will not hear case about mining rights in the Yukon

Canadian Press – September 19, 2013

OTTAWA – The Supreme Court of Canada will not hear the Yukon government’s appeal of a ruling that forced it to consult a First Nation before it registers mining claims.

The Court of Appeal for Yukon previously ruled that the government had a duty to consult the Ross River Dena Council before recording mineral claims on land the First Nation regards as its traditional territory.

Under the Yukon’s Quartz Mining Act, mining companies were allowed to stake a claim and record it in a government registry.

Consultation with aboriginals was required only before further exploration activities could be taken.

A lower court found that simply recording the claims in the government registry satisfied the duty to consult, but the Yukon appeals court ruled mere notice of the recording of a claim did not go far enough.

The Supreme Court did not give reasons for refusing to hear the case, as is its usual custom.

Canadian Zinc wins final permit to operate Prairie Creek Mine

Mining News North of 60 – September 19, 2013

Canadian Zinc Corp. Sept. 18 reported that it has received notification that Aboriginal Affairs and Northern Development (Canada) Minister Bernard Valcourt has approved and signed a type “A” water license for the company’s Prairie Creek Mine in Northwest Territories.

The license was issued by the Mackenzie Valley Land and Water Board July 8, 2013 and with this approval by the minister, will permit Canadian Zinc to conduct mining, milling and processing activities at the Prairie Creek Mine Site, use local water, dewater the underground mine and dispose of waste


from mining and milling. It is valid for seven years and is the final permit needed for the construction, development and operation of the Prairie Creek Mine.

Alan B. Taylor, chief operating officer of Canadian Zinc said, “Approval of the water license is a major milestone in the development of the Prairie Creek project and represents the culmination of a five-year environmental assessment and regulatory process. We would like to recognize the collaboration and cooperation of the Review Board, the Water Board, Parks Canada and other Regulators throughout this process, as well thank the Government of the Northwest Territories, Nahanni Butte Dene Band and Liidlii Kue First Nation and the Dehcho First Nations, for their support of the Prairie Creek project.”

Valcourt gave his approval for the water license as recommended by the Water Board in accordance with Section 81 of the Mackenzie Valley Resource Management Act.

In transmitting the signed license to the Water Board, the minister noted his understanding “that this was a particularly challenging license for all involved in the licensing process. This license is in relation to a project that is subject to a series of very unique circumstances which have given rise to the need for innovative solutions.”

Valcourt noted “the need for a novel approach to water treatment was identified early on in the regulatory process due to the unique environmental conditions of the mine site.”

In early September, Parks Canada issued Water License Parks2012_W001 WL and Land Use Permit Parks2012-L001 LUP, for the construction and operation of that part of the access road to the Prairie Creek Mine, which passes through the Nahanni Nation Park Reserve. Both are valid for a period of five years until August 28, 2018.

All other permits for the project were issued earlier.

“With the approval by the Minister of the Type “A” Water License, and with the Land Use Permits previously issued by the Water Board and Parks Canada, Canadian Zinc now holds all the necessary permits for the road access construction, development mining and milling at the Prairie Creek Mine”, added Alan Taylor.

Mining News Nuggets

Mining News North of 60 – September 19, 2013

Northwest Territories

GOLD – TerraX Minerals Inc. Sept. 18 reported high-grade gold assay results from core re-logged and re-sampled from 36 holes drilled on its Northbelt property in the Yellowknife gold camp, Northwest Territories. These holes were drilled at the North Shoot of the Crestaurum deposit, one of several gold occurrences on the Northbelt property. Highlights include 13.07 grams per metric ton gold over 6.87 meters in hole 85-118; 67.69 g/t gold over 2.00 meters in hole 85-136; 11.96 g/t gold over 6.00 meters in hole 85-166; and 13.45 g/t gold over 3.00 meters in hole 95-134. TerraX is currently analyzing core from more than 175 drill holes previously stored in the core yard at the Giant Mine site in Yellowknife. This historical core included mineralized portions of 74 holes from the Crestaurum deposit that were drilled in 1985 by Giant Mines Ltd to assist them in open pit and underground planning on the Crestaurum deposit. Due to its high grade, the Crestaurum deposit received the vast majority of the historical exploration attention by Giant Mines, including in-fill drilling, advanced mine planning and metallurgical testing. Although already well-defined as a potential resource, the Crestaurum is considered a smaller target than several other shears zones on Northbelt, including the much larger Barney Shear system (see drill hole NB95-16 reported August 14, 2013). The results being reported here are for 36 holes in and near the ‘North Shoot’, an area of higher grade mineralization on the Crestaurum shear that received almost half of Giant Mines’ drilling effort in 1985. The North Shoot is adjacent to an


exploratory shaft sunk in 1946 to a depth of 400 feet (122 meters) and was subjected to mine planning and metallurgical testing by Giant Mines in the 1985 to 1988 period. The free milling nature of the Crestaurum mineralization, as determined by metallurgical testing in 1988, was not conducive to processing in the refractory roaster utilized at the Giant Mine, and thus the deposit was never developed. In February TerraX discovered 187 drill logs for holes drilled between 1945 and 1985 on the Crestaurum deposit. These logs contain handwritten assay results (no assay certificates are available) which indicated a significantly gold-rich shear zone. In June the company located 123 drill collars at Crestaurum and had the locations surveyed. This included almost all of the 74 holes drilled in 1985, making the discovered drill core from these 74 holes a high-priority choice to be re-logged and re-sampled. TerraX believes these assay results are excellent confirmation of this important zone of mineralization. The company collected 358 samples for assay from the drilling in the North Shoot area. The shear structure containing the Crestaurum mineralization has been drilled for 1,400 meters of strike length, but the deepest known intersection into the mineralization is less than 150 meters vertical depth. The deposit is interpreted to extend further north based on widely spaced drilling with significant gold grades. It has almost no drilling to the south of the most southerly zone of mineralization designated the South Shoot. The deposit therefore remains open in all directions. TerraX has re-logged and re-sampled mineralized core intervals from 38 more holes drilled in 1985 by Giant Mines on the Crestaurum deposit. These include holes from the North Extension Shoot area (16 holes), the Central Shoot area (11 holes), and the South Shoot area (11 holes). The company said results of these holes will be released as soon as possible once they are input into the drill data base. The Northbelt gold property encompasses 3,562 hectares (8,802 acres) on the prolific Yellowknife belt, 15 kilometers north of the city of Yellowknife, and covers 13 kilometers of strike on the northern extension of the geology that contained the Giant (7.6 million ounces) and Con (5.5 million ounces) gold mines. The Northbelt property is host to multiple shears that are the recognized hosts for gold deposits in the Yellowknife camp, and it contains innumerable gold showings.

DIAMONDS – Dominion Diamond Corp. Sept. 16 said it has filed an application with the Wek’éezhii Land and Water Board requesting a land use permit and water license to enable mining of the Lynx kimberlite pipe at the Ekati Diamond Mine. The Lynx kimberlite pipe occurs in the southeastern portion of the Ekati mine property, underlying a small lake about 30 kilometer (19 miles) from the main facilities and about three kilometers (two miles) to the southwest of the active Misery pit, in the Lac de Gras watershed, and is part of the Buffer Zone Joint Venture, in which the company has a 58.8 percent interest. The Lynx Project represents an extension of the Misery operations, requiring little new infrastructure. Development of the Lynx Project will require the draining of a small lake as is typical for the kimberlite pipes that have been mined at the Ekati Diamond Mine and the development of an open pit mine with a short access road. All other necessary facilities, such as process plant and camp, are already present, and it is expected that the instruments of environmental management and monitoring currently in use at the Ekati mine will be expanded to include all aspects of the Lynx Project. Based on the scope of the proposed Lynx Project, as well as the fact that the proposed project activities have been previously assessed, it is anticipated that the necessary project approvals will be completed in a timely manner. The Lynx kimberlite pipe is estimated to have 1.3 million tons of indicated resource at 0.8 carats per metric ton and 100,000 metric tons of inferred resource at 0.8 cpt, in each case on a 100 percent basis as at Dec. 31, 2012. The company modeled the rough diamond price for the Lynx diamonds at about US$257 per carat as at Dec. 31, 2012 (1.2 millimeter slot screen cutoff, 86 percent diamond recovery). Mineral resources that are not mineral reserves do not have demonstrated economic viability.


Yukon prospectors unhappy with ruling on mineral staking

Government must consult with Ross River Dena before mineral claims can be registered

CBC News – September 20, 2013

Yukon prospectors are condemning a Supreme Court of Canada decision affecting rules for mineral staking in the Yukon.

The Supreme Court of Canada dismissed the territory’s request to appeal a lower court decision that ordered government to change the way mining claims are registered on unsettled lands in Ross River Dena territory.

Yukon prospectors are condemning a Supreme Court of Canada decision on a case involving the Ross River Dena Council that affects rules for mineral staking in the territory,

That means new rules will have to be worked out through negotiations with the Ross River Dena Council.

Mike Power, president of the Yukon Prospectors Association, says the ruling threatens the livelihood of its members.

"Anything that detracts from the Yukon's otherwise good reputation as a place to invest in mineral exploration will make it tougher for us at the bottom of the food chain to defend the properties we're exploring," he said.

The ruling is expected to have implications for mineral exploration across Canada.

Robert Falcon Ouellette, director of First Nation Studies at the University of Manitoba, says threats of doom from the industry are no more than negotiating positions.

"A lot of First Nations as well want to have resource extraction in order to have employment,” he said. “Companies can say ‘We're not going to do it if you play too hard ball with us; what can you give us to make it worth our while?’"

The government says it will comply with the lower court decision forcing the Yukon to consult with the Ross River Dena before mineral claims can be registered in their traditional territory.

We now have a clear direction from the Supreme Court’

Whitehorse Star – September 19, 2013

Chuck Tobin

The Supreme Court of Canada has denied the Yukon government’s request to hear an appeal involving how mineral claims are staked inside the traditional territory of the Ross River Dena Council.

The decision was handed down by the country’s highest court at 6:45 a.m. – 9:45 Ottawa time – today.

As is standard practice, the Supreme Court did not offer any reasons for its decision.

The government’s request was reviewed by three judges of the high court, including Chief Justice Beverley McLachlin, who is coincidentally in Whitehorse this week for a gathering of senior judges from across Canada.

Representatives of all parties – the territorial government, the Ross River Dena Council and the Yukon Chamber of Mines – acknowledged this morning there is a now a great deal of work ahead.

There was acknowledgment that the decision last Dec. 27 by the Yukon Court of Appeal now stands, and could have implications beyond Ross River, beyond the Yukon.

Chamber president Rob McIntyre said in an interview this morning the Yukon has gone through a significant transformation in the last 25 years, both socially and politically.


It’s gone through that transformation without any negative effects on the economy, he said.

It’s in the interest of all parties – Ross River included – to see that they work their way through the landscape as it now sits following the Supreme Court of Canada decision, he said.

“If done carefully, we should be able to meet our test without any negative impacts to our economy,” McIntyre said. “However, we caution people if not done carefully, there could be significant impact.”

Currently, anyone at any time can stake a mineral claim anywhere in the Yukon and have it recorded by the mining recorder, without telling anyone.

The owner of a mineral claim is allowed under the Quartz Mining Act to do a certain amount of work without telling anyone, including the removal of trees, clearing trails, using explosives, or removing up to 500 tonnes of dirt.

The Ross River Dena Council launched a legal action in 2010. It arguing before anybody stakes a claims in its traditional territory, he or she needs to consult with the First Nation.

Yukon Supreme Court Justice Ron Veale ruled in November 2011 there was a duty to consult with the First Nation.

Veale, however, went on to say the duty to consult could be fulfilled by notifying the First Nation that a claim had been staked in its traditional territory after the claim has been recorded by the mining recorder.

The Dena Council appealed Veale’s decision, as did the Yukon government.

Ross River argued the judge made a mistake in finding the duty to consult could be fulfilled after a claim was staked and recorded.

The Yukon government appealed Veale’s finding that a duty to consult even existed.

In their decision handed down last Christmas, the three judges of the Yukon Court of Appeal upheld the ruling that a duty consult did indeed exist. They disagreed with Veale’s finding that the duty could be fulfilled after a claim was staked.

The Court of Appeal said the Ross River Dena Council must be consulted before any claims are staked inside its traditional territory.

It gave the government one year to comply with the order.

The Court of Appeal noted that the owner of a mineral claim was automatically entitled to carry out some work, work that could potentially affect the aboriginal rights and title of the Ross River Dena Council.

In seeking permission to have an appeal heard by the nation’s highest court, both the government and the chamber of mines argued if the Court of Appeal decision was allowed to stand, it could turn the mining and exploration industry upside down.

It’s of fundamental importance that prospectors or exploration companies be allowed to stake ground before telling anybody where they’re planning to invest their money looking for new mineral deposits, they argued.

The government went on to argue in its request that the Court of Appeal decision could even impact how the government goes about developing and passing new legislation.

Ross River lawyer Stephen Walsh argued in his submission to the top court that the government was making a big hullabaloo over nothing, and should not be given an opportunity to be heard by the Supreme Court.

Just as he emphasized to the Court of Appeal, Walsh pointed out in his submission to the highest court that a remedy to fulfill the duty to consult with Ross River already exists in the Quartz Mining Act.


He said the government can use section 15 of the act to withdraw the Ross River area from staking while it negotiates with the First Nation to identify which lands should and should not be available for mineral staking.

The government used section 15 to withdraw all of the Peel River watershed from mineral staking while it continues work on a land use plan for the 68,000 square kilometres, Walsh pointed out again this morning.

He said the Ross River area is 63,000 square kilometres, or virtually the same size as the Peel watershed.

The government has 3 1/2 months to work out an arrangement with Ross River, he said.

Walsh said he suspects with the Court of Appeal decision now representing the law of the land, there could be implications for the only other two Yukon First Nations without aboriginal land claim settlements – the Liard First Nation of Watson Lake and the White River First Nation.

Following the Court of Appeal decision last December, Walsh expressed doubt that the Supreme Court of Canada would agree to hear an appeal.

He said back then the highest court in the country had already made some significant rulings on the question surrounding the duty to consult First Nations, and how far the duty goes.

Today, he indicated he was not surprised by this morning’s ruling.

Walsh noted the Supreme Court of Canada denies about 90 per cent of the requests it receives to hear an appeal.

In the last nine years, he added, the senior court has ruled on at least five cases around the duty to consult, including a case involving the Little Salmon-Carmacks First Nation.

“You combine those facts, and it is clear in my view, it was a long shot on the part of the territorial government,” he said.

The mines chamber’s president said legal opinions he’s received indicates the Dec. 27 decision by the Court of Appeal as it now stands could reach beyond the traditional territories of the three First Nations without aboriginal land claim settlements.

McIntyre said there could be implications for the 11 Yukon First Nations which have signed settlements, if they choose to raise the question.

It’s his understanding there could be implications in B.C., the Northwest Territories, Quebec and beyond, he said.

Yukon government lawyer Tom Ullyett said today the potential for widespread impact from of the December 2012 Court of Appeal decision was one of key reasons why the government asked to be heard by the Supreme Court of Canada.

The assistant deputy minister of Justice said the very minute the decision was released electronically at 6:45 a.m., his BlackBerry started buzzing and the exchange of emails continued through the early part of the morning.

Ullyett said the government thought the issue at hand was of national importance, but the Supreme Court of Canada obviously felt otherwise.

The court announced earlier this week it would be delivering its decision this morning, he pointed out. Officials with Department of Energy, Mines and Resources, the Executive Council Office and the Department of Justice were waiting for it, he said.

“So yes, we hit the ground running, and we now have a very clear direction from the Supreme Court of Canada.”


Canadian uranium sector prepares for rising tide

Miningweekly.com – September 20, 2013

Simon Rees

TORONTO (miningweekly.com) – Uranium is back on the radar for many in the Canadian investment community. At first glance, this might seem counterintuitive: effective September 2, the uranium oxide spot price stood at $34/lb, while short-term market sentiment remains muted.

But uranium marches to a different, longer-term beat. Bullish analysts and commentators highlight wider macro factors that will eventually act as key supports for output, spot prices and fixed-term supply contracts. Canada is poised to reap great rewards as the world’s second-largest producer of uranium, they argue.

However, others urge caution; long-term macro expectations have the nasty habit of falling flat, while the junior spectrum – so critical for broadening the pipeline of available projects – continues to suffer from strong economic headwinds. Then there is the question of the possible effect that Quebec’s moratorium on uranium exploration and exploitation may have.

MACRO MATTERS

Canada’s two main uranium producers are Cameco and Areva, and both have significant footprints in the prolific Athabasca basin region of northern Saskatchewan.

Cameco expects global consumption to rise from 170-million pounds to 220-million pounds by 2022, with the global reactor fleet increasing from 430 to more than 520 by 2022. China accounts for 28 of the new reactors planned or already being built.

With trade deals now in place, Chinese uptake for Canada-produced material is likely to be great and Cameco is already in discussions with various utility companies. “For the first time, we expect to deliver Canada-origin uranium this autumn,” Cameco senior VP and chief communications officer Ken Seitz said during the company’s mid- August second-quarter results conference call.

Many of Cameco’s views were mirrored by World Nuclear Association senior project manager Ian Emsley. “Under our central scenario, things will pick up pretty quickly to 2020 and then accelerate even more after that. But projections into the future cannot be considered as cast-iron guarantees of course,” he told Mining Weekly.

“China wants to be a leader in nuclear power generation,” he added. “Reports indicate they are making good progress and we’ve no reason to doubt their ambitions in this regard. We believe they’ll be building about half of the additional new reactors in the world for the next 15 or 16 years.”

Commentators also stress the ending by the close of 2013 of Russia’s programme to supply material obtained through reprocessing high-enriched uranium, as a further macro bonus. This will represent the withdrawal of around 24-million pounds of uranium, according to Cameco.

Another support will come from potential supply squeezes as demand grows and new projects take time to bring on stream. “[Project development] takes seven, eight, nine years. So the longer we wait for the signal to bring on new production, the longer it will be at the other end when we bring it on,” Cameco president and CEO Tim Gitzel said on a conference call.

HAVE A CIGAR

Cameco has first-hand knowledge regarding the time it takes; the company holds a 50% stake in the Cigar Lake uranium project that was meant to come on stream in 2007, but is only now about to enter production having suffered several delays.

The operation will eventually produce about 18-million pounds of triuranium octoxide (U3O8) a year, with Cameco entitled to about nine-million pounds through its 50% stake.


“Cigar Lake is a big part of our strategy to increase supply to 36-million pounds a year by 2018 and remains a successful low-cost producer,” Gitzel said.

Cameco and Areva have other projects in the pipeline and have the financial room to manoeuvre, unlike many juniors. However, there are notable exceptions and several companies are still making headway.

For example, Fission Uranium believes its flagship Patterson Lake South (PLS) project in the western portion of the Athabasca basin ticks all the right boxes.

“I’m optimistic about there being as significant deposits on the western side of the basin as there are on the eastern side. PLS is starting to show that to be true,” president and COO Ross McElroy told Mining Weekly during an interview.

Fission and Alpha Minerals each hold 50% in PLS, and Fission recently announced a proposal to acquire Alpha’s stake in late August, with further details outlined on September 3.

Fission’s current drilling programme at PLS is set to end during October, although it has already produced encouraging returns. Mineralisation has been reported as robust, while the company also announced the discovery of a fourth mineralised zone at PLS on August 16.

On September 4, the company unveiled assay results for hole PLS13-075 that included 61 m to 115.50 m for 9.08% U3O8.

“[The project is] not just high-grade but is also shallow, which makes it easier for us to find the right targets. Being shallow also helps lower the potential mining costs, helps ease the science and assists in the discovery process,” chairperson and CEO Dev Randhawa told Mining Weekly in the same interview.

“The Athabasca basin is the ‘Saudi Arabia of uranium’. On average, grades here stand at 2% versus a world average of 0.8%,” Randhawa added. “We’ve got the mills, we’ve got the infrastructure and, most importantly, we have the political will.”

GHOST AT THE BANQUET

The same might not be said of Quebec. On March 28, Quebec’s Minister of Sustainable Development, Environment, Wildlife and Parks, Yves-François Blanchet, announced a moratorium on the granting of certificates for uranium exploration or mining projects until a provincial study on the environmental impact and social acceptance of the sector is completed.

This outcome has been particularly hard for Strateco Resources, which has been developing the Matoush uranium project, located in Quebec’s Otish Mountains, and into which it has already invested $125-million.

Effective December 7, 2012, Matoush has an indicated resource estimated at 586 000 t, grading an average of 0.95% U3O8 for 12.33-million pounds of contained U3O8. Inferred resources contain 16.44-million pounds of U3O8.

The company had secured all necessary approvals from the provincial review committee, the federal review committee, the federal Environment Minister and the Canada Nuclear Safety Commission.

Strateco is now arguing its case through Quebec’s judicial system. The company is seeking compensation for damages it argues resulted from the moratorium, including a $16-million loss in market capitalisation.

“[If necessary], we also reserve the right to seek full compensation. We have spent $125-million until now and my investors are entitled to have real answers,” Strateco president and CEO Guy Hébert told Mining Weekly.

“One of the arguments presented to us was that we have not got ‘sufficient social acceptance’, despite there being no legal definition of this in Quebec or Canadian law,” he says. “[Even then] building social


acceptance is an evolutionary process and, in order to develop it, we must have all the relevant facts in hand. This means further exploration is essential.”

Contemplating the broader situation, Hébert believes an intrinsic part of the problem stems from a growing disconnect among politicians and many in the wider public about the role of the uranium sector and the benefits of nuclear power, particularly its ability to help reduce carbon emissions.

“We talk a lot about the ways of life in Quebec – well, climate change affects everyone . . . today, nuclear power is a safe way to produce electricity and to protect the planet,” he said.

Keeping the macro factors in mind, favourable dividends for Canada’s uranium sector are indeed likely; and with near-production projects like Cigar Lake and development plays like PLS in the pipeline, the industry will no doubt remain in a position of strength for years to come.

Quite rightly, an open and frank debate about the uranium sector and its activities should be an ongoing one. But developments such as those in Quebec are disconcerting; companies should have the right to expect a clear and steady framework through which they can operate.

To suddenly move the goalposts in this manner not only hobbles project development but also broadcasts a message to the global marketplace: caveat emptor, or ‘let the buyer beware’. Given the current economic climate in Quebec, many might argue that this is the wrong message at the wrong time.

Canadian exchanges push to relax private placement rules

September 20, 2013

Allison Martell

TORONTO – (Reuters) – Canada’s main stock exchanges are pushing for regulatory changes that could make it easier for retail investors to participate in small financings long deemed too risky for the general public, a move that could help shore up the country’s hard-hit junior mining sector.

John McCoach, president of market operator TMX Group Ltd’s small-cap TSX Venture Exchange, said his organization has asked Canada’s securities regulators to consider allowing a public company’s existing shareholders to participate in private placements.

Private placements are share issues that are offered to select buyers such as institutional investors and wealthy individuals who qualify as “accredited investors,” and not to the general public.

The TSX Venture Exchange, the main trading venue for hundreds of small Canadian-listed mining and energy companies, wants to expand the qualifying group.

Under its proposal, investors who have held stock in the issuer or 60 days or more would qualify to be included in private placements, but their investments would be capped at C$10,000 ($9,800) per company per year.

The rules limiting access to the exempt or “closed” market were designed to protect small investors, who may be less sophisticated, from the risks of sinking their savings into stocks that can be highly speculative.

McCoach said Canada’s securities commissions are considering the proposal. He said he has been informed that regulators in some of the country’s provinces have already drafted exemptions, but would not say which provinces are moving on the idea.

“It gives listed companies another tool to access capital,” McCoach said of the proposal. “But even more importantly, it allows existing shareholders to participate in the growth of the companies they are already shareholders in.”


The Ontario Securities Commission and the British Columbia Securities Commission, primary regulators for the vast majority of junior mining companies in Canada, did not immediately respond to requests for comment.

HELP FOR JUNIOR MINERS

A drop in the price of commodities and a spike in costs has drained money from the mining sector, especially Venture Exchange-listed exploration companies that rely on equity financing. Over the past year, dozens of cash-strapped companies have closed tiny private placements at rock-bottom prices, hoping to ride out the tough market.

Private placements are a relatively inexpensive way of raising funds, and thus a key source of capital for small companies. Making it easier for investors to participate could boost the funds available to junior miners, buttressing Canada's reputation as a center of mining finance.

But changing the rules could take a year or more because of the lengthy comment period required, and may come too late for the most vulnerable juniors. Others would benefit over the medium term.

The change would level the playing field for retail investors, who are shut out of private placements that can end up badly diluting their investments in small companies. In theory, just about anyone can invest in a public company by buying shares on an exchange, but in practice many penny stocks are thinly traded.

INVESTOR RISK

In part, private placement deals have been restricted to sophisticated investors because retail investors may not have as much insight into how a security will trade once it is on the market or its level of liquidity.

Private placements are generally done without a prospectus - a document that discloses the risks associated with an investment and gives buyers certain legal rights if they are misled - relying on the fact that "accredited investors" will be aware of the risks.

Institutional investors such as banks and pension funds are accredited investors, but few individuals are allowed to buy new securities without a prospectus, and those that are must have financial assets worth more than C$1 million.

The Ontario Securities Commission's website explains that "the law assumes that accredited investors do not need the protections offered by a prospectus" because they can get the information they need to evaluate an investment on their own, and can handle losing their entire investment.

McCoach said this exempt or "closed" market has worked well, and that it is an efficient way of raising funds, but that it can be expanded.

"I think it's an appropriate evolution of how we've managed the closed system in Canada," he said.

Source of article, click here: http://www.reuters.com/article/2013/09/20/canada-venture-financing-

idUSL2N0HF1HT20130920

http://www.reuters.com/finance

http://www.reuters.com/article/2013/09/20/canada-venture-financing-idUSL2N0HF1HT20130920

http://www.reuters.com/article/2013/09/20/canada-venture-financing-idUSL2N0HF1HT20130920

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