Sensor and Sensibility

Sensor technology seems of unlikely importance to the mining industry, but in recent years it has proved pivotal to the development of new technologies capable of increasing productivity and safety within operations. Nowhere is this more likely to be the case than in Australia, where the Commonwealth Scientific and Industrial Research Organisation (CSIRO) has been busy researching a number of projects that rely heavily on sensor technology.

The country’s national science agency is rapidly rising in stature among the global mining community, having developed a number of solutions that have gone on to be adopted by the commercial sector. The government-funded research organisation first became involved in the mining sector in the mid 1990s – coincidently for a project that has only recently proved fruitful, thanks in no small part to the role of sensor technology.

The right timing

Often working in tandem with key industry players, CSIRO can spend anywhere from a couple of years to a decade researching and trialling technology protocols before launching into the commercial sector. In 1994, the organisation began a project aimed at developing automation for drag lines in open cut coal mines. The system is applied to large cranes used to rip the rocks from the surface following blast drilling and uses sensor technology to create digital terrain mapping of the often unstable ground below.

Although the system still requires an operator onboard the crane, the system brings a degree of automation to operations, therefore theoretically adding greater efficiency and precision. Given the hundreds-of-million-dollar values of some of these vehicles, the technology also has fierce potential to remove some of the maintenance costs often picked up from the brutal nature of the job.

The CSIRO’s science leader for robotics Jonathon Roberts says overall he believes now is the right time for the project to finally prove fruitful.

"This is a very old project and one of the reasons our group first came into existence. We have now done two proof of concept projects, where we have tested the system on large cranes for a few weeks at a time – the last one being back in 2004. As with most of our projects, the technology is on the leading edge and it has since been a case of the industry catching up," says Roberts.

"The technology has matured and the sensors are now more robust and available off shelf at a reasonable price. Also the expensive computer systems we used to process the information in the mid 1990s can now be replaced with a standard ruggedised laptop. Finally, there has been a huge drive from the mining industry itself to improve efficiencies at existing mines."

Laser quest

The sensors utilised in the Dragline Swing Assist (DSA) project are laser scanners, which measure the distances to and from objects via laser beams. In this instance, the laser sensor sits on the axis of the crane, rotating around until it builds up a picture of the ground underneath. The technology stems from a system originally designed for factories to prevent human contact with dangerous equipment – whereby the laser beams would trigger the equipment to stop if its boundaries were breached.

It first emerged in the mining sector when the technology evolved into a mapping aid device for surveyors. The transition into the DSA project was, however, not so simple.

"The early system could understand its own positioning but not where the ground was, so the operators in effect had to train the sensors. This meant we had to be very conservative when swinging the boom as the precision was not yet in place," Roberts says.

"With the sensors now available we can develop systems so that the machine itself monitors the ground and is able to adjust according to the change in heights. As the machines are offloading material each day and bulldozers are moving around, the sensors must be constantly kept updated to know where exactly everything is."

Going down under

The sensors’ value above ground has also been put to good use underground. Another CSIRO project aims to create a robotic truck to automatically load explosives for blasting the underground tunnels. Also at a proof-of-concept stage, the project has a distinct eye on safety as it sets about automating one of the most dangerous mining duties.

By scanning the whole tunnel, the sensors are able to automatically locate the drilled holes and a robotic arm, which uses vision technology, is implemented to feed the explosives into the slot. "The system therefore initially relies on laser scanners to find the hole, before the cameras are used to finely manoeuvre the explosives into position," says Roberts.

Unlike the DSA project, which only caters for a very niche segment of the industry, the automated explosive trucks project could potentially have more widespread implementation. The volatile nature of the job has led to years of research into a full proof solution. Remote control trucks have been implemented in the past – firstly with the driver operating the truck at the entrance of the blasting tunnel and secondly controlling the truck entirely remotely from above ground. The first only increased casualties while the other seriously hindered productivity.

"The only solution was to make the trucks more automatic. They can drive full speed and there is no safety issue – so finally we have a much-needed solution that offers the same productivity without placing people in danger," Roberts says.


The butterfly effect

Evidence of sensor technology already making an impact in the commercial mining world is strongly apparent in CSIRO’s automated haul trucks project. The concept is currently being successfully commercialised by global truck and mining equipment manufacturing giants Caterpillar.

Relying on laser scanning sensors to construct a cross section of a tunnel, which is then fed into the truck’s steering system, the automated haul vehicles completely remove the need for a driver.

"Although the mining industry is conservative, it seems that a lot of new equipment being purchased has these systems built into them. So where fleets are being replaced, this technology is being embraced," says Roberts.

"Sensor technology has certainly taken on a more central role at the CSIRO, although a lot of that technology is being driven by other industries, most notably the automobiles sector. The drive to install these sensors onboard cars for automated parking systems and cruise control is ultimately leading to their mass production, which will cause the overall cost of the sensors downwards," he adds.

China’s Baosteel says profit could weaken in 2009

Baoshan Iron and Steel Co, the listed unit of China’s largest steel mill, said on Thursday it would be hard to achieve a 2009 net profit at this year’s level as it confronts weak demand.

The comments came after Baosteel, the world’s fifth-largest steelmaker, late on Wednesday reported a weaker-than-exected 19.2 percent rise in third-quarter net profit and said key product areas would see losses in the fourth quarter, due to falling domestic steel prices and high raw material costs.

“It will be very difficult for Baosteel to maintain its 2009 earnings at the same level as this year’s, as a medium-term correction has begun in the steel industry,” Baosteel Board Secretary Chen Ying told an online briefing.

Several analysts lowered their forecasts for Baosteel’s 2008 and 2009 earnings after the third-quarter announcement.

Shanghai-based Orient Securities said on Thursday in a note that it expected the company’s earnings per share at 0.68 yuan in 2008 and 0.41 yuan in 2009.

The forecast for 2008 suggested Baosteel could see a loss of around 500 million yuan ($73.13 million) in the fourth quarter.

The global economic slowdown, coupled with a domestic housing slump, has hit China’s domestic demand and exports.

Top steel mills have cut output by up to 20 percent partly due to hefty inventories that are losing value and hurting their cash positions.

Baosteel now has inventories worth about 52.1 billion yuan, Chen said, including 17.7 billion yuan of raw materials and 16.3 billion yuan of finished products.

Sources close to Baosteel Group, the listed unit’s parent company, said earlier this month that the group would cut production by about 1 million tonnes in conjunction with an overhaul of a major blast furnace.

Chen did not comment directly on output cuts, however, saying only that the company would schedule its production in the remainder of the year in accordance with orders it received.

Cui Jian, vice president of Baosteel, told the briefing that Baosteel’s state-owned parent was studying a possible increase in its shareholding in the listed unit but the company itself was not considering buying back its shares.

Baosteel’s Shanghai-listed shares were up 0.22 percent at 4.61 yuan in afternoon trade, underperforming a 2.3 percent rise in the benchmark Shanghai Composite Index

Green from Gold "The Rehabilitation of Golden Cross"

Introduction

Tucked away in a Coromandel valley down a dead end road is a modern New Zealand gold mining success story. Faced with rugged terrain, some of the highest rainfall in the country, and complex geology, the Golden Cross mine has endured cyclones, a major land movement, and antimining misinformation to become a productive operation, and the first modern mine in New Zealand to successfully move into planned closure and final rehabilitation.

above from left: Golden Cross prior to mining in 1990, during active mining in March 1994, and during rehabilitation, March 2001.

The Site

The Golden Cross mine site is situated eight kilometres north-west of Waihi in the Waitekauri Valley at the base of the Coromandel Peninsula. The mine site ranges from 270 metres to 460 metres above sea level on steep to rugged terrain, which receives in excess of three metres of rain per year. The site is bordered on three sides by land controlled by the Department of Conservation, including the ecologically sensitive Coromandel State Forest Park.

A Brief History

Between 1895 and 1920 the Golden Cross underground mine produced just over two and a half tonnes of gold. When the mine closed the site became farmland.

In 1977 two exploration licences were taken out. Initial investigation showed potential. A prospecting licence was obtained in 1980 and a drilling programme commenced in 1981. By mid 1985 exploration had revealed a potentially mineable deposit. Project feasibility followed. An Environmental Impact Report, a mining licence application and applications for water rights were lodge in late 1987. Water rights were granted in 1988. The mining licence was granted in April 1990, having been the subject of an appeal to the Planning Tribunal. Bonds of $12.1 million were required to be lodged to allow the project to proceed.

The new Golden Cross mine began production in December 1991. Mining was by underground and open pit methods. The Golden Cross underground mine was the first underground gold mine to operate in New Zealand since the nearby Martha Mine at Waihi closed in 1952. A skilled workforce was developed mainly by training workers hired locally.

above: Geologists underground at Golden Cross during the active mining phase. Over 11 kilometres of tunnels reaching a depth of 300 metres below the surface were driven through the rock.

Coeur d'Alene Mines Corporation purchased the Golden Cross mine in March 1993 in an 80%/20% joint venture with New Zealand company Viking Mining.

Between December 1991 and April 1998 the mine produced a total of 20.5 tonnes of gold and 52 tonnes of silver with a present day value of approximately $430 million, most of which was spent in New Zealand. At its peak Golden Cross employed 243 staff, as well as indirectly employing approximately 750 people in service and support industries. The company's annual staff payroll exceeded $10 million.

The mine officially closed on 17 December 1998 and became the first modern mine in New Zealand to move into planned closure and final rehabilitation. The area is now used for grazing, wetland and native habitat.

The Mining Operation

Ore hauled from the underground and open pit mines was processed at the mill located on the site. Over 11 kilometres of tunnels reaching a depth of 300 metres below the surface were driven through the rock. Waste rock was used to backfill the tunnels and build the tailings impoundment. Ore was crushed then put through the mill to remove the gold and silver. Once the precious metals had been removed, the remaining fine rock and water mix, now called tailings, was pumped to the tailings dam. Cyanide used in the gold extraction process was recycled using a new, patented process. This was a world first for its use on a commercial scale.

above left: The Cyanisorb plant recycled cyanide used in the gold extraction process to the leach circuit for reuse.

above right: The Golden Cross process plant with the Coromandel State Forest in the background, 1997. The plant has since been removed and the area rehabilitated.

The waste rock embankment that impounded the tailings was constructed with suitable rock from the open pit. On the surface the area may just look like a hill and a lake, but it is actually a very carefully engineered structure. It consists of a series of layers and zones, each of a different material, and each carefully placed. In addition the structure features an underground drainage system. The construction of the dam took place over a number of years in a series of lifts as material became available and storage capacity was required. Fault zones run through the area, so the dam was designed and built to withstand a Maximum Credible Earthquake much larger than the 1931 'quake that devastated Napier which measured 7.9 on the Richter scale.

above: The waste rock embankment is a carefully engineered structure consisting of a series of layers and zones.

Tailings from the processing plant were pumped through pipelines to the tailings dam. Excess water was decanted and piped to the water treatment plant before discharge.

The dam contains over five million tonnes of tailings. As it was filled, the tailings consolidated. At closure a cap of fill and topsoil was placed around the perimeter of the dam extending out over the tailings. The area was contoured and revegetated. The central area was left as a body of water that drains clean water through the outlet channel into the Waitekauri River.

above: As part of the rehabilitation process, staff lay geotextile cloth around the perimeter of the tailings pond. Clay and topsoil is then layered on top and the area revegetated.

Environment

New Zealand's permitting and operating requirements are amongst the most stringent in the world. Numerous Resource Consents require monitoring and reporting.

Environment Waikato took the lead role under the RMA for environmentally related issues with Hauraki District Council occupying the role of second tier regulator behind the regional council.

From the original planning stage it was obvious that effective water management would be the key to successful environmental management of the project.

Steep terrain and high rainfall on site required the mine to use an advanced water management system. During operation a series of diversion drains collected water from surrounding hills and diverted it away from the site, into the local stream system. Underground drains collected any natural or tailings seepage from the tailings impoundment area and directed this water to the water treatment facility. Water pumped from underground was directed to settling ponds or the water treatment plant prior to discharge into the Waitekauri River.

above left: The water treatment plant. above right: Monitoring water on site.

All water on site was monitored according to a rigorous quality and quantity schedule. At the water treatment plant, in addition to a comprehensive water quality monitoring system, juvenile rainbow trout were used to establish a real-world real-time biomonitoring system to monitor the potential effects of discharge water on the receiving stream ecology. Three test aquaria were set up; one contained 100% river water as a control, another 20% water treatment plant discharge and 80% river water, and another 100% water treatment plant discharge. Water was continuously pumped through the aquaria. Treated water was taken from the retention pond 6–12 hours before planned discharge. If fish appeared distressed the discharge to the river could be stopped prior to that water entering the discharge pipe and the water treatment plant put into recycle so that potential problems could be identified and rectified.

This was the first use of continuous effluent biological monitoring in New Zealand.

above: Juvenile rainbow trout became the modern equivalent of the miners' canaries when they were used to establish a biomonitoring system to monitor the potential effects of discharge water on the receiving stream ecology.

During operation any potential long-term effects of the mine discharge into the Waitekauri River were assessed by monitoring the plants and animals that live in the aquatic environment. Changes in the abundance and distribution of aquatic life are regarded as reliable indicators of an effect. Independent studies of algae, macro invertebrates (e.g. snails, caddis fly) and fish were conducted. Annual analyses of fish tissue for bioaccumulation were also performed. Regulatory agencies were also involved, cross-checking results and providing independent data.

above left: Regular monitoring of the Waitekauri River. above right: Over 100,000 thousand native trees and shrubs have been planted in and around the mine site.

The on site and in steam biomonitoring programmes have shown no measurable impacts to fish or other aquatic organisms during the operation of the mine.

In addition to its regulatory requirements the company undertook an extensive programme of rehabilitation and enhancement in line with its philosophy of 'Producing and Protecting'. This was a voluntary initiative by the mine and has lasting benefits:

1. Recognised stands of native trees have been extended to establish local corridors with similar stands and enhance wildlife habitat.

2. Riparian habitat enhancement programmes were instituted to protect stream banks from erosion and increase habitat quality both in-stream and on riparian boundaries. This has involved co-operating with local farmers to exclude stock from riparian areas.

3. Over 100,000 native trees and shrubs have been planted on and around the mine site.

4. Swampy areas located away from the riverbed were fenced and planted with native species to encourage wetlands establishment and enhancement.

Plant material was generated from seed eco-sourced from the local area and from seedlings raised at a local nursery to preserve the local vegetation's distinct genealogy.

Consultation

The Joint Venture has benefited from regular ongoing consultation with a Peer Review Panel and a local Community Consultative Group. Initially developed during the operational phase of the mine, both groups have continued through into the closure phase. The Peer Review panel members were firstly approved by Environment Waikato and then jointly appointed by Environment Waikato and Coeur Gold.

above: Local residents and members of the Community Consultative Group meet on site to observe rehabilitation progress in 1998.

Specific conditions of the Water Rights required the establishment of a Peer Review Panel to assist Regional Council staff assess the technical compliance of the operations. The panel members were appointed and funded by the company, but were independent of it, and reported to council staff. The Peer Review Panel provides assurance to the regulating authorities that the ongoing onsite works conformed to good industry practice. The perspective provided is that of an objective industry professional. The system worked extremely well in practice with panel members providing balanced insight for council staff on industry good practice in specialised fields of engineering, hydrology, geochemistry, revegetation, and later landslide mitigation and mine closure. The panel removed the problems that industry sometimes experiences when trying to present complex technical material to council staff, while at the same time providing council staff with a degree of comfort that their decisions were based on expert recommendation.

The Community Consultative Group has met on a regular basis for four years. The group is comprised of Regional Council staff members, District Councillors, environmental groups, iwi, and local residents. Regular site visits have been well attended by members of the CCG and the local community.

Land Movement Remediation

In mid 1995 routine monitoring for a future raise of the tailings impoundment identified a re-activation of historic land movement beneath the impoundment. This deeply seated movement was ultimately determined to be occurring over an area of one square kilometre, where a slab of ground up to 100 metres thick was moving slowly down-slope on an old slip surface.

above: A slab of ground up to 100 metres thick on which the tailings dam was built was moving slowly downslope on an old slip surface,

The company notified regulatory agencies and held public meetings to discuss the situation and address public questions and concerns. A formal Community Consultative Group was established to keep local people informed of site developments.

The media struggled to come to terms with the situation. Used to dealing with disaster scenarios, they had neither the technical knowledge nor the vocabulary to adequately explain the situation. The company produced an eighteen minute video explaining in layperson's language the situation and likely remedial action. This was widely circulated. At the same time a world class investigation and remedial measures programme was implemented at a cost of $27 million.

above left: GPS monitoring of land movement. above right: Monitoring of water quality at horizontal bores.

Throughout 1996 the Golden Cross mine site became perhaps the most measured and studied piece of ground in the world as mine staff and experts from New Zealand and overseas worked to first identify the problem and then work out how to deal with it.

The solution took several forms. To reduce groundwater pressure and lubrication of the slip surface where movement was occurring, a series of horizontal drainage holes was drilled at numerous sites. A drainage tunnel between four and five metres in diameter was driven through the rock some 15 metres below the slip surface. Holes bored upwards into the slip surface drained more water. Water volumes in the tailings impoundment were reduced. A saddle filter buttress was constructed of rock quarried nearby to add strength to the tailings impoundment structure.

Throughout all of these operations groundwater and surface water were constantly monitored. Water of a suitable quality was released off site. If necessary, water was diverted to holding or settling ponds for further treatment.

By late 1996 movement rates had been reduced significantly. By late 1997 the problem had been generally controlled, and by 2000 the annual rate of movement detected was less than the annual uprising of the Southern Alps.

Throughout all of this time the structural integrity of the tailings impoundment was maintained.

Closure

All mines eventually close. It is how they close that is vitally important. In the past the traditional definition of mine closure was to surrender the mining licence and walk away.
This definition no longer applies. Changes in the industry have evolved in line with changes in public expectations of stewardship for the future. Modern mines are planned with closure in mind.

above left: Fertiliser application is an integral part of the rehabilitation process. above right: Cattle graze on rehabilitated pasture in 1999. In the background the removal of the process plant is almost complete.

Today, mine closure is an integral part of the mining cycle, and is investigated and planned for before a mine begins to operate. Mine sites are rehabilitated and stabilised so they are suitable for a sustainable land use that is compatible with the surroundings. Former mine sites in New Zealand are now being used for farming, forestry, recreation and conservation.

Effective closure involves a range of issues. Closure must meet all regulatory requirements as laid down in the conditions on the Mining Licence and Resource Consents. In addition, human resource management and community involvement and consultation add a social facet to the procedure.

Rehabilitation activities at a modern gold mine include: decommissioning the mine, providing surface drainage and erosion protection across the entire site, establishing self sustaining vegetative cover, meeting water quality standards, and minimising post-closure maintenance requirements.

The Peer Review Panel has described the Golden Cross operation as a world class mine closure.
Closure at Golden Cross focussed on the issues of handling site stormwater, compacting and sealing potentially acid generating waste rock, and creating long term stable structures. These objectives had been planned for both during initial planning and mine operation.

Buildings and equipment have been dismantled and removed. The mine's operational footprint has been recontoured to more closely resemble the surrounding landform.

Some administrative buildings remain. These will be used for recreational or educational or business use of the site. A range of partnership options is currently being investigated.

Major drainage channels have been constructed to handle runoff from a 1000-year rainfall event (715mm in two days).

The water treatment plant will continue to operate until all water on site meets discharge criteria and can be released into the Waitekauri River without any mechanical treatment. From this time the wetland areas will act as passive water treatment systems.

above left: The open pit has been capped, recontoured, and drainage channels added. above right: The rehabilitation process almost complete, 2001. The recontoured open pit can be seen in the foreground with the rehabilitated tailings dam in the background. The bush at bottom left is part of the Coromandel State Forest Park.

Potentially acid forming waste rock has been sealed and capped. The open pit has been contoured with low permeability mine overburden and revegetated. Drainage channels have been formed. The tailings impoundment has been partially capped and the perimeter revegetated. Drainage channels maintain the level of the freshwater pond.

Areas surrounding the minesite that had previously been cleared for farmland have been revegetated with native species. Bush areas adjacent to the Coromandel Forest Park have been fenced to exclude stock and provide a buffer zone.

A comprehensive monitoring programme keeps track of landform stability, vegetation rehabilitation, surface water quality, groundwater quality, and flora and fauna.
Final rehabilitation will have been completed when all consent conditions have been satisfied and the area has been returned to a self sustaining, stable landform.

Bonding provisions ensure that no ratepayer funds are required to successfully rehabilitate the site or cope with any future maintenance.

above: The tailings dam, summer 2001. Walking tracks, footbridges, and picnic facilities have been provided. Information panels along the tracks display the history of Golden Cross.

Conclusion

After another productive life the Golden Cross mine has closed for a second time. Within a short period of time little evidence will remain of the mine's successful second life. This very lack of evidence is part of the successful closure operation nearing completion as Coeur Gold redevelops a self-sustaining environment at the head of the Waitekauri Valley.

There will be other evidence, however: the sort modern gold mines like to leave behind.

Evidence of a productive partnership between the mine and the community.

Evidence of the stewardship role a modern gold mining company actively accepts.

And evidence of the commitment of the Coeur d'Alene Mines Corporation to Producing and Protecting.

It's what gold mining in New Zealand is all about.

And it's evidence that you really can get Green from Gold.

Notes From the Underground: Mining & Metals in Review

Andrew M. Alper

Investing in the world of mining can be like the act of mining itself, without any of the safety reforms that have come into place over the last one hundred years. First, you're down there and everything is going great; your tools are brand new, the foreman is talented with proven successes, and all the precautions are in place. Then, you hear an ominous rumbling, and you brace yourself, heart pounding. Slowly, all goes still, the noises dissipate and you breathe a sigh of relief. Looking over at your canary, you discover his little legs sticking straight up in the air. As the air gets thin and you discover there is no way out and muse, "I should have left when I heard the rumbling." Your tombstone reads, "A man of blind faith, in the junior mineral exploration market." This describes how many of us felt in September of 2007, when the entire market felt the reverberations of the sub-prime loan crisis.

A great many stocks halved in value, practically overnight, and everyone from CEO's down to lowly stock holders were asking, "What happened?" Properties with great resources still had great resources, companies with impressive strategic partnerships were still strategically partnered. In short, all the people, resources, events and discoveries that had once gained recognition from the market in terms of stock price were still in place, yet the recognition was gone. The great giant of the stock trading public, to which the fund manager, day trader, and retired 401K stock dabbler are all a part of, had fallen into a deep sleep.

Even amid record commodity prices, when one would usually see a related spike in exploration, there's barely been a blip. One would think that after gold jumped to $950/oz from $650/oz year prior, that a 30% percent boost would come to companies that plan to produce the stuff, at a considerable profit, no less. But this is was not the case; in fact most dropped 30%. We who are closely involved with the metals and mining industry have spent many hours contemplating, "When will the Giant wake up?"

Lately, however, it seems that although the giant is not quite raging again, it has at least begun to stir a bit. And the times a company has caused it to scratch its' nose, it has blessed the company concerned with impressive rewards. Consider this junior exploration company with a wealthy and famous big brother, then throw in a juicy new discovery, and you might actually catch the attention of the sleeping giant. That's what happened to Eastmain Resources.
Eastmain recently announced that they and mid-tier gold industry rock-star, Goldcorp had moved forward with a pretty impressive agreement. Don Robinson, CEO, explained the deal, "Opinaca and Goldcorp decided that the district is important enough to fund the project completely to bankable feasibility, giving them a higher percentage of ownership. Not only have they decided to fund the project to that level, but for the interim, Eastmain is still the operator of the project. So instead of Eastmain having to issue shares to raise capital to pay for exploration, Goldcorp pays 100 percent of everything. In fact, they pay us to explore it, and with a management fee on top,"

Robinson added, happily, "Essentially, we have made a discovery on Goldcorp land, using Goldcorp money. Adding a third gold deposit to our holdings clearly could have a spectacular impact for our company along the way." Eastmain also recently announced very favorable drilling results. For their troubles, they have seen 50% increases in their stock prices, positive coverage from analysts, and a very promising future.

Obviously, things are not back to normal, when a deal like Eastmain's would send the stock soaring 150% times its' prior worth. At least the giant's reflexes are working properly, and where there's life, there's hope.

In future columns, I will give status reports on the confusing activities of the investing public, and highlight those companies in the metals / mining industry that have delivered results, or are about to.

Adriana Accessing Brazil’s Vast Iron Ore Reserves

Dr. Allen M. Alper and Bryan Martin

Mike Beley and Rick Barclay are brilliant business partners. The two exploration veterans have a wealth of experience as evidenced in Metals News’ recent interview with them. Their new venture, Adriana, will probably signal to the prospective investor a unique opportunity given their years together as partners. In the midst of a monumental corporate transformation, Beley and Barclay made time to share with us some insight into their extensive history together as well as to give us more than a glance into the workings of Adriana. I’m proud to mention that I played a role in this transformation. A couple a years ago I interviewed Mike and Rick for a feature article in Metals News and I became aware of their great knowledge and business acumen regarding iron ore, Brazil, ports and shipping. I immediately thought of them when my friend Victor Webb from Marston Webb International introduced Alexander Kollontai to me. Alex explained that he had very innovative and strategic ideas for bringing millions of tons of iron ore to the Chinese market that have been bottlenecked in Brazil with no port that would allow shipment to China. He said he was looking for a partner that had the ability to turn his dream of a Port in Brazil to access millions of tons of iron ore into a reality. I then introduced Alex to Mike and Rick at the Union Club in NYC and a revolutionary business plan was created and the stages were executed. I was pleased to witness the synergy of the group unfold.

The story begins in the mid-‘70s when Rick and Mike, who also co founded aggregate shipping entity, Polaris Minerals Corporation, seized on favorable circumstances to form Bema Industries. With the help of maverick CEO Clive Johnson and his real-deal team of management gurus, Bema, which skyrocketed to become a household name in North America, went on to become Bema Gold Corporation. In a $3.5 billion deal just last year, Bema Gold merged with Kinross Gold.

In 1990, the team of Beley and Barclay decided it was time to leave Bema, and together with partner Gary Nordin, the gentlemen formed Eldorado Gold Corporation (not necessarily as a footnote, it should be mentioned that both Bema and Eldorado became multibillion dollar market cap companies). Seizing on the momentum of their vast prospects, the group followed through putting into production several mines in Mexico. Not long after, the partnership branched out even further by finalizing a deal with South African gold group Gencor and solidifying its assets in Brazil with the Sao Bento gold mine. A few years ago I interviewed Mike and Rick for Metals News. “With that experience in Brazil, we were able to understand and go forward with the iron ore port concept that was brought to us by Alex Kollantai of Athena Resources out of New York,” notes Barclay.

Although the group has been extremely industrious managing its holdings in Canada and Europe, it is Brazil that Barclay and Beley now consider the cornerstone of Adriana’s future enterprise as a daring yet well-honed competitor in the iron ore shipping industry. It is here Beley brings up the uniqueness of their recent acquisition of port land in Brazil and elaborates. “Our company’s definitely at a point of transition. We’ve been working hard to assemble a number of assets around the world, in Northern Canada and Northern Quebec, Finland and Brazil. The highlight and focus of our work now exists in Brazil where we acquired a port site and are now working at developing that port site and spinning off some of the other assets, so the company is being transformed into a new vehicle focused specifically on iron ore with its resources in Brazil and Quebec.”

In November of last year, and in advance of their interest in securing iron ore in Brazil, Adriana purchased 750,000 square meters just outside Rio de Janeiro in the Sepitiba port region in order to enable them a delivery point to the market. Barclay and Beley estimate construction time on the port to take approximately 12 to 18 months to complete, beginning later this fall or winter, with an opening projected for the first or second quarter of 2010. Although an unusual approach to mining, the proceedings for the port are all complete and development is under way. “We are now in the process of looking to secure those resources and develop that further, so it’s been quite a unique approach, and we’ll see what unfolds in the next legs,” adds Beley.

Despite this iconoclastic and daring approach to tackling the demand for a commodity such as iron, the importance of Adriana having a strategic port site for its intended operations cannot be overstated. For one, there’s really no other feasible way to deliver the iron ore, which is initially just the raw components, to the market, and resources in limbo with nowhere to go “have no real asset,” according to Beley. Taking this advanced step in their marketing schemata will enable Adriana to deliver to the market and ultimately develop relationships with companies able to encourage the entire operation to blossom, to “add to that integrated supply line from mine to the client and through World-Link, our Chinese partner, we will be able to bring shipping to the markets and clients in China. And so now all we have to do is secure the iron ore resource to add to that,” summarizes Beley.

Brazilian iron ore source waiting to be developed


Alteration zone marking chromite horizon within Muskox Intrusions

Outside of Brazil, Adriana is just as busy with its other projects. The Lac Otelnuk and December Lake iron projects, multibillion ton formations north of Schefferville have had successful drill campaigns in 2007. Later this year the team anticipates expanding those resources, eventually following through with a 43-101 compliant resource projected for early 2009. Rounding out their remaining Canadian interests is MIE. Based in Nunavut, the operation centers around a platinum, palladium, copper nickel deposit which experienced a very successful drill program last year.” We developed a brand new and world class style of base metals mineral deposit, the potential for the platinum copper nickel,” Barclay enthuses, including their intent to spin it out into a separate company over the next six months called MIE Metal Corporation to be listed on the TSX, the shares of which eventually will be dividended to Adriana shareholders.

Currently in scoping study outside of North America, Adriana is steady at work on their titanium iron vanadium project based in Finland. Over the course of this year Barclay and Beley plan on spinning that operation out into yet another separate company to be listed in Europe. “In this way, we’ll have a focused iron company with our Quebec iron deposit and our port in Brazil, and we’re actively pursuing opportunities to acquire iron assets in Brazil to complement the port facility,” concludes Barclay.

Beley is not one bit shy relaying Adriana’s uniqueness in its approach to a historically by-the-numbers market. “I guess at this point in time, we feel very strongly that Adriana is very undervalued. It’s seen as a company that’s a mining group with a mining background, has assembled a good package of assets, but we have been successful on every front, and so it’s effectively eluded the focus of the company, and so I think the market is maybe not clear on exactly what we’re doing.”

Indeed infrastructure is crucial and the sui generis nature of mining iron ore in Brazil while spinning off its non-core assets puts Adriana in a class all its own, especially in light of the promise of securing its reserves as their port establishment fleshes out in the next couple of years.


Because of their optimism in acquiring a resource so highly sought after in recent years, not to mention Barclay and Beley’s instrumental determination in establishing successful companies, the two remain confident in a very significant appreciation in value of their operations. A smile can almost be heard over the phone as Beley patently articulates. “We have a lot of experience and knowledge of this business. And so I think that’s a very strong asset in moving Adriana into the future.”

Vannessa Ventures Ltd. - Costa Rican Crucitas Deposit Approved for Production

Dr. Allen M. Alper and Jill Cueni-Cohen

The Crucitas Project has the potential of being a low cost gold mine, producing over 82,000 ounces per year, which will be mineable in about eighteen months. We interviewed John R. Morgan, President, CEO & Director of Vannessa Ventures Ltd., just before the long-awaited news broke on April 24th: Industrias Infinito S.A. ("Infinito"), a wholly owned Costa Rican subsidiary of the Canadian firm Vannessa Ventures Ltd., announced that it received final official approval from Costa Rica’s Ministry of Environment and Energy (MINAE) to develop and produce 18,000 hectares of exploitation concessions at their Crucitas gold project. Along with the approval of the modified Environmental Impact Statement ("EIS") received on February 4, 2008 from SETENA (the environmental department of MINAE), production can now move forward at the Crucitas gold deposit.

Located in the underdeveloped north-central part of the country, Morgan explained that the Crucitas deposit is actually situated along the gold-producing Rim of Fire. “Costa Rica has a gold-mining history, even though there are no active gold mines in the country right now,” he said, noting that this project is on the border of Nicaragua, which supports several gold mining operations. “One knows that gold deposits don’t recognize borders."

The Crucitas deposit was identified by Placer Dome in 1992 and underwent extensive exploration work until 1998, when the project was sold to Lyon Lake Mines Ltd. Vannessa Ventures purchased the project and received its exploitation license from the Costa Rican Government in early 2002, at a time when gold prices ranged $300.00 an ounce or less. Said Morgan, “This was a pretty courageous move, I think, because mining was a tough business then.”

From Gold Explorer to Gold Producer

Based in Calgary, Canada, Vannessa Ventures is a unique company. “We have one controlling shareholder, who is an entrepreneur and industrialist here in Alberta,” explained Morgan, noting that he owns over 50% of the company’s shares. “I think that’s important, because having a controlling shareholder adds a degree of stability to our company. So, investors can be aware that we are not subject to being bought out by an opportunistic company if we hit a rough patch or have a low spot in our share price.” The company also has offices in Venezuela and prospects in Guyana. A geologist trained at the University of British Columbia, Morgan joined Vannessa Ventures as its president in 2004. He spent the bulk of his 30-plus year career in mining with Manalta Coal Ltd., which was the largest coal mining company in Canada until it was taken over in the mid-‘90s. More recently, Morgan served for four years as Vice President Operations in charge of a large tonnage coal operation in Venezuela, known as the Paso Diablo mine.

Vannessa Ventures’ Vice President of Operations, Dr. John Thomas, has relocated to Costa Rica to oversee the construction of the Crucitas mine and the initial operation period. Said Morgan of Thomas, “He’s a metallurgist with many, many years of planning, construction, and operating experience. In fact, his most recent construction was the Choco 10 Mine in Venezuela, which is now currently owned by Rusoro.”

Morgan explained that his predecessors were forward-thinking when they acquired the Crucitas property and identified the fact that the project could be mined cheaply because of the saprolytic material -- soft, weathered rock which lies on top of the deposit – that can easily be processed through a mill at a high rate.

Morgan estimates that when mining the overlying saprolitic material, the mill will initially produce at the rate of about 7,500 metric tons of ore per day, and that will fall off to 5,000 metric tons a day in later years. “As we get into the harder rock, production will drop down because we’re limited by grinding capabilities. But that will still mean an average production of about 82,000 ounces per year over the life of the mine,” he pointed out, adding that the Crucitas project is just the beginning. “In addition to that, we have 1,800 hectares of an exploration concession, and those are different under the mining regulations in Costa Rica. An exploitation concession means that one has the right to go in and actually develop and produce the resource while an exploitation concession gives you the right to explore for additional prospects.”

A moratorium on open pit gold mining in Costa Rica since 2002 was lifted by MINAE in April, according to a newspaper article in La Nacion, published on April 24, 2008. “The Crucitas Project was not impacted by that,” noted Morgan. “We were grandfathered because we already had certain permits in place.” However, lifting the moratorium now paves the way for the exploitation concessions held by Infinito adjacent to the Crucitas project area. Morgan refers to this as a high potential area, having already exhibited interesting anomalies surrounding the mine.

“We have approvals,” said Morgan. “We’re ready to construct an actual mine that’s going to be profitable in its own right. But the fact that we have this large additional land body surrounding the mine in a known gold producing area with identified gold mineralization of a very substantial grade should give investors encouragement that this is not a one-off -- there is a potential for additional resources to be identified and developed in the area.” One of these areas called Conchudita was also drilled by Placer Dome and gold mineralization averaging over 4.5 grams per tonne was identified. This property has a historical inferred resource estimate of 470,000 oz but the work was done prior to the implementation of National Instrument 43-101 and does not comply fully with that standard.

Environmental and Social Impacts

The plans for developing the deposit at Crucitas are well advanced. “We have purchased the mills, and they’re in California awaiting a shipment to Costa Rica. We have both a SAG mill and a ball mill in hand. We purchased or control all of the land required for the project, including the Tailings Dam infrastructure (which will contain the waste product from the mill) in the mining area,” said Thomas. “We have paid our environmental bonding – a deposit to the government of $600,000.00 U.S. dollars – and we are currently working on improving the road to the mine, putting in some bridges that need reinforcing and other development activities in the area.” Employing the latest technology in waste water treatment, Vannessa Ventures has publicly promised the Costa Rican government that all of the releases from the Tailings pond will be free of cyanide. In addition, Morgan said, “We will replant the area that’s disturbed, plus some additional lands that we have that won’t be disturbed, and we will take those from their current use, which is low-level agriculture and plantation forestry and put them back into native species. “Costa Rica has a very demanding and a very exhaustive environment approval process and we respect that.” Acknowledging that some communities in this very poor region of Costa Rica will be impacted by the mine, Morgan emphasized Vannessa’s ongoing commitment to providing the local people with community and social development projects, including computer training and sewing classes. They’re also tackling sustenance issue by encouraging organic farming, fish farming and helping the community establish a co-op in the area.

“We have strong community support there, and we think that is [due] to the fact that we’ve continued with these socially responsible activities,” he noted.

The Right Place, the Right Time

Costa Rica provides a stable regime in a country that has no history of radical changes to tax laws or other things which impact some developments in that part of the world, Morgan pointed out, adding that the country’s legal system is renowned for being fair and equitable.

“We have gold at historic highs over the last several months, so this is the time, in terms of the commodity cycle, to be developing a mine like this,” said Morgan. “And what we have here is a mine that’s ready for development. We have a a well defined deposit which will be a low-cost operation; a very simple mine with low strip ratios and with very high gold recoveries. And what I like about this deposit as well is the blue-sky potential in the large area surrounding the mine.

Morgan estimated that it will take 18 months to construct the Crucitas mine, and then it’s all systems GO. “The mine will be producing gold right from the start,” he pointed out, noting, “As soon as you start digging into the ore body, you’re actually producing gold as the deposit is not covered with any significant amount of overburden material.”

Outstanding Powder Metallurgy Parts Acknowledged

NEWS For Release on June 11, 2008 Washington, D.C. #5

METAL POWDER INDUSTRIES FEDERATION 105 COLLEGE ROAD EAST PRINCETON, NEW JERSEY 08540-6692 USA TEL: (609) 452-7700 FAX: (609) 987-8523 E-MAIL: info@mpif.org WEB SITE: www.mpif.org


Winners of the 2008 Powder Metallurgy Design Excellence Awards Competition, sponsored by the Metal Powder Industries Federation, were announced here at the PM2008 World Congress. Receiving grand prizes and awards of distinction, the winning parts are outstanding examples of powder metallurgy’s (PM) precision, innovative design ability, superior performance, sustainable technology, and cost savings. High-density gear rolling, warm compaction, and metal injection molding are some of the more innovative techniques and technologies used to produce the parts.

Grand Prize Winners

PMG Füssen GmbH, Füssen, Germany, and its customer Schaeffler Group Automotive, Hirschaid, Germany, won the grand prize in the automotive engine category for a stator used in a variable valve timing (VVT) system in a 1.4 liter engine. Made from a modified iron–copper PM material, the complex part is formed to a density of 7.0 g/cm3. The stator, featuring five intricate center holes, is a one-piece design that replaced two parts. Very tight tolerances help to minimize any internal oil leakage between the adjoining pressurized chambers. The PM stator helps reduce fuel consumption and the formation of exhaust gases, as well as improving engine performance, especially torque at low rpms. It has two functions: a spline for the timing-belt pulley and the VVT housing. The PM process offered substantial cost savings despite finishing operations such as sizing, machining, deburring, and steam treating.

Burgess-Norton Mfg. Company, Geneva, Illinois, and its customer, Means Industries, Saginaw, Michigan, won the grand prize in the automotive transmission category for a notch/backing plate and a pocket plate used in a mechanical diode (MD) one-way clutch for a six-speed automatic transmission. Made from sintered-hardened PM steel, the notch/backing plate weighs 1.85 pounds and the pocket plate, 2.54 pounds. The PM plates are assembled with steel struts, coil springs and a snap ring, which form the one-way clutch. Both parts are made to a density of 6.7 g/cm3. The notch/backing plate has a tensile strength of 75,000 psi, and the pocket plate a tensile strength of 90,000 psi. PM provided superior precision and a 70 percent cost savings over wrought steel parts. Both parts are vital to the MD clutch design by permitting drive torque to be applied to the transmission in second and sixth gear as well as torque transfer in reverse gear.

Mitsubishi Materials PMG Corporation, Tokyo, Japan, and its customer Fuji Kiko Co. Ltd., Shizuoka, Japan, won the grand prize in the automotive chassis category for a high-strength gear set used in a new tilting and telescoping steering column. The gear set consists of a tooth lock and two cams. Made from diffusion-alloyed PM steel, the parts have a density greater than 7.05 g/cm3 and a tensile strength greater than 159,000 psi and a 57 HRA hardness. In replacing forged and machined parts, PM offered substantial cost savings with a net-shape design that eliminated the need for machining.

Capstan Atlantic, Wrentham, Massachusetts, captured the grand prize in the hardware/appliances category for a PM steel gear set used a high-volume business machine printer. The gear is roll densified to a surface density of 7.8 g/cm3. It has an AGMA quality 10 precision level and the pinion, an AGMA 8 level. The core density of the gear and pinion is 7.3 g/cm3. The gear- tooth-surface fatigue resistance equals that of a wrought steel 8620 carburized gear. The part, which has opposing helix angles, is formed to net shape, except for hard turning the datum journals. Single pressed, the PM gear replaced two machined gears at a cost savings of more than 40 percent.

Parmatech Corporation, Petaluma, California, won the grand prize in the medical/dental category for a 17-4 PH stainless steel articulation gear used in a surgical stapling unit. Made by metal injection molding to a density of more than 7.65 g/cm3, the MIM part has an ultimate tensile strength of 130,000 psi, yield strength of 106,000 psi, and a 25 HRC hardness. The complex MIM design is formed to net shape and requires no finishing operations. It has tight tolerances and provided a 70 percent cost savings, compared to machining the gear from bar stock.

Awards of Distinction
Cloyes Gear & Products Inc., Paris, Arkansas, received the award of distinction in the automotive engine category for PM low-alloy steel intake and exhaust sprockets used in a variable valve timing (VVT) system in a high-performance, double-overhead cam V-6 engine. Using warm compaction, the sprockets are formed to a density of 7.25 g/cm3. The 7.7 millimeter fine-pitch inverted sprocket teeth are compacted to a near-net shape. The complex design provides a multifunction part—a high-strength timing sprocket that performs cam phasing functions. The teeth are heat treated and tempered to a 70 HRA typical hardness. Each sprocket has a typical tensile strength of 170,000 psi; a 52,000 psi fatigue limit and compressive yield strength of 183,000 psi.

ASCO Sintering Company, Commerce, California, and its customer Performance Friction Corporation, Clover, South Carolina, won the award of distinction in the automotive chassis category for a series of 316 stainless steel bobbins used in a new braking system for race cars and high-performance vehicles. The two-level part is available in 14 variations with eight or more bobbins used in a single brake rotor assembly. The bobbins aid in tripling the brake-rotor fatigue life, reducing drag at elevated temperatures, as well as reducing vibration and temperature. The parts are made to a density of 7.0 g/cm3 and have a tensile strength of 70,000 psi, yield strength of 45,000 psi, a 13 percent elongation, 48-foot pound impact strength, and HRB 65 hardness.

Kinetics Climax, Inc., Wilsonville, Oregon, won the award of distinction in the hardware/appliances category for three 17-4 PH stainless steel lock-cylinder parts made by metal injection molding for Black & Decker Hardware and Home Improvement, Lake Forest, California. The MIM parts (a locking bar, pin, and rack) operate in the Kwikset SmartKey lock cylinder, which contains one locking bar, five pins and five racks. The high-precision parts have a typical density of 7.7 g/cm3, and a typical tensile strength of 128,000 psi and typical yield strength of 100,000 psi. The complex PM design provides significant cost savings and allows the consumer to re-key the lock easily, without removing it or getting professional help.

FloMet LLC, Deland, Florida, and its customer, Starkey Laboratories, Inc., Eden Prairie, Minnesota, won the award of distinction in the electrical/electronic components category for a hearing aid receiver can made by metal injection molding. The thin-walled part is made from a nickel–iron–molybdenum alloy material that provides the magnetic shunt effect required in the hearing aid to separate the internal receiver signal from the telecoil signal. The MIM part was previously deep drawn and required several interim annealing steps to achieve the necessary depth, in addition to forming the internal undercuts. Choosing the MIM manufacturing process provided a 50 percent cost savings over deep drawing as well as improved performance.