By 8:30 a.m. on the day of his presentation to members of the Sudbury Area Mining Supply and Service Association (SAMSSA), Michael MacFarlane had already been up for four hours and worked for three. As the senior vice-president of technology and innovation for AngloGold Ashanti, MacFarlane lives in Sudbury and works in South Africa, and believes the mining industry has arrived at the era of the global virtual employee.
“That’s how the work gets done,” he said. “That’s the future.”
To keep up with the rising demand for minerals, companies need to focus on global networking to find the expertise and innovation needed to sustain the industry, MacFarlane said. For the last 100 years, the industry has operated using the same methods, a combination of human labour matched with heavy machinery and automation, he noted. But a higher mining intensity is needed in order to keep up with future needs, and that requires mining companies to change the way they do things. “We cannot continue to mine the deposits we have at the rate we’re mining them,” MacFarlane said. “You have to take the intensity and triple it if we have any hope of meeting the signal of what the market’s looking for. The current mining methods we have, I just don’t believe they’re going to work in the underground context and deliver the response that the market’s asking for.”
One area of concern is investment in research and development (R&D). Big companies like Boeing and IBM are spending between seven and 13 per cent of their gross revenue on R&D, while the mining industry is spending a paltry 0.2 per cent, and most of that is handed over to suppliers, MacFarlane said. He believes R&D and innovation can more effectively be achieved by a consortium or network of global partners working together and making a collective effort to find solutions to mining’s most pressing problems.
“Within the mining industry, it’s who understands this first, who understands it the best and who can implement it first that wins the game,” he said. “It’s about networks and managing decisions.” MacFarlane was given this task after joining AngloGold Ashanti in 2010. He’s since brought together a group of 250 people from different companies and organizations around the world working to brainstorm solutions to industry conundrums.
Through this model, MacFarlane acknowledged, there is a tradeoff between retaining intellectual property (IP) and strategic advantage. He argues the benefit is developing generic technologies that can advance the industry as a whole without giving competitive advantage to one company over another. “We need more R&D being done, and if we encourage and offer the IP up and even pay for some of it, you’re going to get more done,” he said. “As soon as you lock it down you’re going to get less money spent. And our argument is, for the next 10 years, open it up. The industry needs a complete overhaul of the mining approach. Ten years from now lock it down, but for the time being, it’s about speed. That’s where the value is.” MacFarlane also advocates the idea of borrowing to innovate: applying technology from one industry for use in another. Working in solitude is expensive and slow, he argued, but there’s no reason to reinvent the wheel if applicable technology is already out there.
AngloGold wanted to develop a drill that would pinch and swell, to follow the ebb and flow of a mineral reef, and figured it would take about five years to develop, MacFarlane said. After a search, the company discovered the technology already existed and is in the process of adapting it to its purposes. “Half of the technology that we’ve identified that’s required to do gold on tap, which is in-situ leaching, already exists in the oil and gas industry,” he said. “You just have to go and take it and configure it for what you’re doing.” Not only does this approach leave a smaller footprint, but it also requires less capital investment, timelines are shorter, and mining intensity, the ultimate goal, is increased, he added.

Dave Stefanuto, the project director with Vale's Clean AER project, spoke to Sudbury Area Mining Supply and Service Association (SAMSSA) members at their April 26 meeting. Photo by Heidi Ulrichsen

By: Heidi Ulrichsen – Sudbury Northern Life Staff

Members of the Sudbury Area Mining Supply and Service Association (SAMSSA) recently got a look at some of the contracts they’ll be able to bid on as part of Vale’s $2 billion emissions reduction project.

The project director of Vale’s Clean AER (atmospheric emissions reduction) project, Dave Stefanuto, gave a presentation on the initiative at a April 26 gathering of SAMSSA members.

Clean AER involves a complete retrofit of the converter aisle at the Copper Cliff Smelter between now and 2015, including the construction of a second acid plant and a secondary baghouse, which will help to capture emissions before they go up the superstack.

The project, which will reduce sulphur emissions by another 70 per cent from current levels, was prompted by stricter provincial environmental regulations.

Clean AER will create about 1,300 short-term jobs, although Stefanuto said there will be ongoing work for contractors as a result of the project because Vale will require more supplies and services for its new infrastructure.

Engineering work on the project began earlier this year, and construction will start in earnest over the next few weeks, Stefanuto, a Sudbury native who has overseen other large projects for Vale, such as the Long Harbour processing plant in Newfoundland, said.

“A lot of the initial site preparation contracts have been awarded,” he said. “Interpaving have been doing some of the site preparation work. They’re mobilizing on site this week. Lopes is going to do the demolition. They’re also mobilizing this week on site.”

Only about seven per cent of the contracts have been awarded thus far. According to Stefanuto’s presentation, of the 26 contracts which have been awarded, 14 have gone to local companies, and several more to companies in northern Ontario.

For example, Anmar has received the contract to fabricate converter vessels, and provide the primary hoods and the converter bustle pipe and windbox; Westlund got the nod for supplying carbon steel pipe and fittings; Metalec Sudbury Inc. won the contract for portable power centres; and Tulloch Geomatics has picked up the contract for surveying.

There are several contracts coming up in the near future, including concrete installation, the wet gas cleaning plant, the site operation and maintenance of temporary facilities, site transportation and the mobile equipment maintenance shop.

Montreal-based SNC-Lavalin has been hired by Vale to oversee the project, including awarding the contracts, Stefanuto said. Vale has encouraged SNC-Lavalin to look at local mining supply and service companies first for these contracts.

It’s important to hire local contractors because they’re already familiar with Vale’s Sudbury operations, Stefanuto said.

Vale will continue full production while the new infrastructure is under construction, something he compares to “open heart surgery.” In the converter aisle — which Stefanuto said is the “heart” of the processing facility — this could be potentially dangerous.

“For a lot of the converter aisle workers, we specifically targeted the local contractors and met with them, because they’ve worked in our converters before,” Stefanuto said.

“They understand how the operation works, and they understand the hazards. They have relationships with our operations people. We see that as a valuable asset.”
At the same time, local contractors already do a lot of work at Vale to keep its regular operations running smoothly, Stefanuto said.

“We want to make sure we don’t pull them away from that and impair what we’re doing to maintain our existing operations — robbing Peter to pay Paul,” he said.

Given the shortage of skilled trades workers, it’s going to be difficult to find enough workers to complete the Clean AER Project, admits Stefanuto.

He said Vale plans to stagger the start time of its projects so that contractors won’t be competing for personnel. The company also plans to try to recruit workers from other parts of the country.

“We’ll target where we think the people are available,” Stefanuto said.

Dick DeStefano, the executive director of SAMSSA, said he was “exceptionally pleased with the transparency” of Stefanuto’s presentation, and that a Sudbury native is directing the project.

He said he’s also happy that so many of the contracts awarded to date have gone to local businesses.

In Vale’s normal operations, about 60 per cent of contracts go to local companies. According to Stefanuto’s presentation, that added up to $799 million in contracts in 2011.

DeStefano said he’d like 60 per cent of the Clean AER contracts go to local businesses as well. He said he hasn’t received any promises from Vale on that subject, though.

If there was bad news amidst this contract largesse, DeStefano said he’s concerned about the impact the skilled trades shortages will have on Clean AER.

“There’s going to be a lot of guys leaving (their current jobs) for short-term gain, and hoping they can go back (when the project is complete),” DeStefano said. “I’m not sure we have 1,000 extra people around to go do the project.”

Even if Vale’s promise to recruit workers from other areas of the country pans out, DeStefano still has concerns, including finding enough housing for these personnel.

In terms of SNC-Lavalin leading Clean AER, DeStefano said he’s fine with that, as Vale had to hire a company with the expertise to take on such a large-scale project. SNC-Lavalin has even joined SAMSSA.

“I said to them ‘You have to join us if we’re going to work together,’” he said. “They said ‘Yeah, we can join you.’ As long as they have an office here, and they have a couple of people working here, which they do, they legitimately fit into our membership.”

Posted by Mark Gentili

The goal is to become the most comprehensive compendium of information for mining in Northern Ontario, said SAMSSA’s executive director, Dick DeStefano.

“Our only medium worldwide is the Internet,” he said. “I needed to find something that projected and portrayed that on our website, that we were really in tune with the changing way people were absorbing and accumulating information, and searching.”

If SAMSSA’s primary function is to promote ingenuity in the marketplace and members’ products and services, SAMSSA should lead the way, he reasoned.

With approval from the board, DeStefano commissioned Sudbury-based Fuel Multimedia to assess the site’s assets and areas of improvement. The analysis found that 60 per cent of the site’s visitors—it gets 2,500 unique visits a month—were accessing the site via tablets and handheld devices.

Accessing SAMSSA’s information from any portable device, from anywhere in the world, became a priority, so that even while mobilized visitors and SAMSSA members could access the site’s information. Using their SAMSSA profile as “pocket resource,” members can meet with potential clients, pull up their profile and show them the services and products they offer.

“If you go on a BlackBerry and you plug in our name, SAMSSA, it is now formatted so that it doesn’t spill over or get cut off on a handheld device anywhere in the world,” DeStefano said. “Maybe it’s not the sexiest stuff in the world, but it’s a good business model and it also demonstrates that we are, as an association, moving forward.”

DeStefano also wanted to create a geographical portal that would highlight businesses beyond the confines of the Sudbury District. The site now features a search option that allows visitors to find companies under one of six geographical areas: North Bay and Nipissing, Sault Ste. Marie, Sudbury, Timmins, Ottawa and Thunder Bay.

Each year there is debate about changing the SAMSSA brand to become more encompassing of the other Northern Ontario mining districts. But, DeStefano noted, Sudbury remains the most easily recognizable mining district across the globe, and, with 320 companies and $3.4 billion in annual sales, has the highest concentration of mining-related products and services.

“Sudbury is still the richest ore body in the world and it’s got a history of 120 years,” DeStefano said. “You can’t ignore that it’s a trademark.”

Added to the website is the Google translation service, which, while far from perfect, makes the site that much more accessible to non-English-speaking visitors, DeStefano said. “You can click on any article on our website and you can have it translated to any language in the world.”

Perhaps the most significant change, however, is the shift from a “pure” website to one that includes advertising. Rather than bringing mining companies on as members, DeStefano is looking to sign them up as sponsors.

For a fee, a mining company can purchase advertising on the site, and in return, SAMSSA will have information available about both stable and emerging mining companies so that visitors can follow their progress.

Members, too, are able to purchase advertising, as well as enhanced profiles that include video clips.

It’s part of an effort to reduce SAMSSA’s reliance on government funding and become more self-sufficient, DeStefano said. Revenue generated from the ads will go towards bringing in more guest speakers, undertaking a membership drive and continuing to enhance the website.

A mix of local, regional and international mining stories and video clips compiled from other sources will continue to be posted on the site.

DeStefano said he’s as likely to get requests about how to get in touch with mining companies as he is about industry news these days, and has taken on the role of de facto broker, facilitating introductions between northern companies and potential clients.

That demonstrates the success that the organization has had in building up the SAMSSA brand over the last eight years, said DeStefano, who predicts that SAMSSA will have one of the most dominant websites in Canada within a year.

Immediate response to the changes has been positive, and traffic numbers show visitors stay on the website for an average of five minutes, visiting between seven and eight pages. International traffic is still limited, but DeStefano hopes that will change as site enhancements continue.

“Five years ago if I posted video of mining in Peru, people would have scratched their heads, but now they’re recognizing the benefit of connectivity to other markets,” DeStefano said. “They recognize the need for a global presence and want information instantaneously.”

The flourishing Canadian mining sector could see almost $100 billion invested over the next decade, said Canada’s Minister of Natural Resources at the Prospectors and Developers Association of Canada (PDAC) convention being held in Toronto this week, March 4-7.

According to the Canadian Mining Journal, Natural Resources Minister Joe Oliver said that Canadian companies account for 40% of the world’s exploration expenditures, and their spending this year is expected to exceed $4.2 billion.

The PDAC convention is the largest mining event in the world, and this year it attracted a record 30,000 attendees.

Minister Oliver reiterated the Canadian government’s commitment to promoting growth in mining and mineral resources and said that it would be moving ahead with efforts to modernize the regulatory process, with the goal of having “one project, one review in a clearly defined time period.”

He assured his audience, that this regulatory streamlining will be done “while improving environmental protection and meaningful Aboriginal consultation.”

The Ontario Construction Secretariat took the occasion to issue its own statement about the “sparkling picture” that represents mining in Ontario, drawing attention particularly to the Ring of Fire in Ontario’s Far North.

“The mining industry in Northern Ontario is a bright light in our economy,” said Sean Strickland, Chief Executive Officer of the secretariat. “It has been and is forecasted to continue to be a major driver of construction projects in Ontario that are creating great opportunities for growth, expansion and job creation.”

At the same time, Strickland warned that the key issue for both the construction and mining industries in those areas is going to be finding the labour to do the work.
by Canadian Consulting & Engineering

They went looking for diamonds in the rough, but found something perhaps even more valuable.

In 2002 DeBeers, the world’s leading diamond miner and trader, ventured into Ontario’s far north muskeg near Hudson’s Bay seeking the precious stones. What it discovered instead was copper and zinc.

But that was enough to spark a flurry of other exploration efforts. One potentially commercial find led to another, and by 2008 prospectors struck gold, so to speak. What they uncovered, for the first time in commercial quantities anywhere in North America, was an extremely rare mineral called chromite. The discoveries are so vast that the Ontario mining industry and others speak of a multi-billion dollar deposit that may take generations to fully exploit.

Indeed, the province considers the chromite and related discoveries in a 5,000-sq-km region now known as the Ring of Fire as “historic.” Says former Northern Development, Mines and Forestry Minister Michael Gravelle: “It’s home to one of the most promising mineral development opportunities in Ontario in more than a century.”

Chromite, when processed into an alloy, is used in the production of stainless steel, among other products. It is highly valued for its ability to increase hardness, toughness and resistance to corrosion. In thin chrome-plated coatings, it protects auto parts, appliances and an array of other products including weapons.

Just four countries account for 80 per cent of the world’s chromite production. They are South Africa, the single largest supplier, along with Kazakhstan, Turkey and India. China’s booming economy purchases half the world’s supply. The United States buys about 15 per cent.

Ontario is committed to developing the chromite and other deposits in the Ring of Fire as quickly as possible and with due regard to environmental impacts and the needs of the Aboriginal communities within the region. “We have to be concerned with the broader context,” says Christine Kaszycki, appointed by the province last year as coordinator of a new Ring of Fire Secretariat. The government established the secretariat to help move the various mining and related infrastructure projects forward.

Adds Kaszycki: “This is not just about building mines or roads. The entire province will feel the positive economic impact, especially the north with its mining consulting and equipment industries, as well as its supply and service sectors. We have to get it right, especially for the Aboriginal communities to ensure they have the tools to fully participate in the development.”

Experts say there is enough chromite in the isolated and inhospitable Ring of Fire to meet North American needs for two centuries.

As coordinator, Kaszycki’s role is to work with other provincial ministries, the federal government, local communities including First Nations communities, the mining industry and other stakeholders to facilitate the orderly development of the Ring of Fire’s massive potential.

Interested parties are welcoming the secretariat. “Establishing the Ring of Fire Secretariat shows the province’s commitment to development of this discovery,” says Christy Marinig, CEO of the Economic Development Corporation in Timmins, a northern community where one-quarter of the labour force derives its living from mining, either directly or indirectly.

Chris Hodgson, president of the Ontario Mining Association, agrees. “With the secretariat, the government has the right structure to get everyone in the room and proceed in a timely fashion. They understand the importance of this opportunity.”

At present, there are two mining proposals moving forward. Chromite is not a factor in one of them, at least not yet. Noront Resources of Toronto instead wants to develop its nickel as well as copper and platinum reserves in a distinctive fashion. To minimize the environmental impact, it is proposing an underground mine, mill and tailings storage facility. According to company president Wes Hanson, the idea is to “build a mine you can walk over and not even know is there.”

The company hopes to start production in 2015. While Noront also has substantial chromite holdings, mining this resource is to come later. A Chinese steel producer earlier this year purchased some 20 per cent of the company, a clear sign of the global interest in the region’s mineral wealth.

Meanwhile, Cliffs Natural Resources of Cleveland, Ohio has an even more ambitious timetable for developing the Black Thor chromite deposit it purchased for $240 million in 2010. It hopes to have all the permits and environmental assessment approvals by the end of 2013. “That’s aggressive but achievable,” says William Boor, who is overseeing the proposal as senior vice-president for Global Ferroalloys, a division of Cliffs, one of the world’s leading mining companies.

One reason for Boor’s optimism is the encouragement and help the project has received from the Ring of Fire Secretariat and the Ontario government. “They want to make this work,” says Boor. “We feel totally supported by the province.”

The Cliffs proposal calls for an open-pit mine, at least for the first 10 to 15 years. The operation also requires a ferrochrome production facility that refines the ore for use in making stainless steel. That process requires 1,700-centgrade furnaces that consume enormous amounts of electricity. Boor says the facility will require 300 megawatts annually – larger than any electricity consumer in Ontario.

To encourage development, the province offers significant incentives to reduce electricity costs in the North, especially in the resource sector. Says Boor: “The power rate is a big factor in whether this proposal goes ahead.”

Boor is reluctant to put a price tag on the Cliffs proposal, but observers expect it to cost about $1.3 billion and create more than 1,000 jobs between the mining site and the production facility. For its part, however, Noront has put forward a specific cost estimate – $734 million.

These estimates do not include the substantial cost of transporting materials to market or, in Cliffs’ case, first to a processing smelter. Both projects are some 300 kilometres from either the nearest road or rail link. Helping stakeholders sort through competing infrastructure transportation proposals – which route and whether it should be an all-weather road or rail line – is one of the many issues Ring of Fire Coordinator Kaszycki is attempting to resolve. The cost could be as much as $2 billion.

Kaszycki, various government bodies and environmental agencies are considering the broad impact the different transportation proposals would have on the environment, on Aboriginal communities as well as on mining other deposits in the faraway region. “Once the basic transportation infrastructure is in place, it will provide the potential to unlock additional development opportunities,” she says.

Exploring in these remote wetlands with their harsh climate is expensive enough. Maps and aerial surveys are the first line of attack. Test drills follow only when prospecting companies are comfortable with the risk. Another consideration will be the cost of bringing electricity transmission lines to the region for mines and their camps, as well as to remote Aboriginal communities.

RING OF FIRE QUICK FACTS (All numbers approximations)

Size: 5,000 square kilometres; most discoveries to date are in a small, 20-kilometre long strip.

Location:

· 1,000 kilometres northwest of Toronto.

· some 300 kilometres away from nearest rail line or highway.

· two hours flying time north of Thunder Bay, 500 kilometres away.

Number of claims: 30,000
Number of prospecting companies: 35
Significant discoveries: chromium, copper, zinc, nickel, platinum, vanadium and gold.
Number of current development proposals: two
The Ring of Fire name: Noront founder Richard Nemis was company president when the first significant mineral finds were made in the region. A lifelong Johnny Cash fan who liked to dress all in black, Nemis named the region after one of the country-and-western’s singer’s most famous ballads.

Some 30,000 claims have been established to date in the region. Many discoveries – chromite, nickel, copper, zinc and gold – have great potential to be developed once the Noront and Cliffs projects pick up more steam.

Although no diamonds have been found, the Ring of Fire promises to keep Ontario on the global mining activity map for decades to come.

But finding the talent to run these future operations has many companies scrambling to fill the ranks.

A mining labour report listing potential job opportunities in the mineral industry in northwestern Ontario was released Feb. 15 in Thunder Bay.

The report was a collaboration between the North Superior Workforce Planning Board and the Mining Industry Human Resources Council.

The much-anticipated document was presented as part of a larger trade show showcasing career opportunities and the mining activities in the region.

“We’ve piqued a lot of interest,” said Madge Richardson, the training board’s executive director.

Richardson said more than 40 mining and supply companies were interviewed in Thunder Bay, across the northwest, and in the James Bay Ring of Fire.

The intent was to gauge what their workforce needs were over a 10-year span and what recruitment plans they have in place. The report was funded by the Ministry of Training, Colleges and Universities.

“There’s so much talk, speculation and interest because of the Ring of Fire,” said Richardson, “but when you start looking at the region, it’s only a small portion of what’s really going on in mining and mineral exploration.”

All of the employers interviewed expect “significant pressure” to be felt in the region as advanced exploration work moves into production.

The report said the region’s already-tight labour market is characterized by a “very high demand” in finding workers with the right skill sets.

As developments in the Ring of Fire unfold, that demand will outstrip future supply.

Two businesses indicated that their operations were unable to fill all the positions available because of a lack of qualified labour.
A key finding was the high degree of labour mobility in the region. Because the global mining industry is so robust, employers are in a fight to attract top-flight engineers, skilled trades and experienced drillers.

The employers interviewed expect two to five new mines to open in the region over the next five years, and of the more than 300 exploration projects now underway, they said five to eight should become mines by decade’s end.

Depending on whether the economic outlook is volatile or is in full growth mode, the mining industry in the Thunder Bay district will require between 1,110 and 4,150 workers over the next 10 years.

A mid-range estimate indicates the greatest need is in the trades and labour occupations. About 2,840 people will be needed in extraction and production positions.

There will be 895 people required for “undesignated occupations” such as janitors, administration, accountants, nurses and in health care.
About 220 supervisors, coordinators and foreman need to be recruited, but the most difficult positions will be finding 150 technicians whose expertise makes them very mobile operators.

“This makes attracting and retaining them difficult and resource intensive,” the report stated.
To lessen the impact of the aging workforce, some companies have resorted to job sharing between older and younger workers, mentorship programs and some are keeping retirees around as consultants.

Companies had varying responses to their attempts to integrate Aboriginal people into their workforce. Some reported “no success while others experience significant success.”

The biggest challenge is the skills gap between what the individuals possessed and what was required for the industry.

Some companies have done their own internal training, but for smaller firms, it was beyond their means and they’re looking to the government and educators for help.

The report suggests employers should also look to attract immigrant talent from the large cities and find ways to get more women into the industry.

One possible approach to growing the local talent pool is to find more flexible and innovative ways to train new workers faster without compromising quality.

The report said industry must be more active on educational task forces, planning boards and committees, and must communicate better with educators in taking “longer planning horizons” to anticipate their future needs.
By: Ian Ross
Northern Ontario Business

www.nswpb.ca

www.mihr

Tony Makuch, President and CEO of Lake Shore Gold, commented: “We are happy that, following an assessment of our Timmins West Complex, Franco-Nevada has decided to join us as a new shareholder and to invest in the future of this Complex. Timmins West continues to demonstrate considerable potential for both near-term profitable production and longer term exploration success. The $50 million we will receive provides valuable capital to support the ongoing development of our mines and projects as we progress towards rapid production growth later this year, including the completion of our mill expansion to 3,000 tonnes per day. We have been diligent in pursuing capital alternatives that do not significantly dilute existing shareholders, and believe our arrangement with Franco-Nevada accomplishes that objective.”

David Harquail, President and CEO of Franco-Nevada, commented: “We are very pleased to acquire an interest in the currently operating Timmins West Complex, which has a significant production expansion underway and has excellent resource growth potential in the prolific Timmins Gold camp.”

Royalty Arrangement

Under terms of the royalty agreement, the Company will receive US$35 million for a 2.25% NSR royalty on production from the Company’s Timmins West Complex. The Timmins West Complex includes the Company’s Timmins and Thunder Creek deposits (collectively the Timmins West Mine), the 144 property, the Thorne property (Gold River Trend) as well as a number of wholly owned and joint venture claims on the west side of Timmins, Ontario.

Equity Investment

Lake Shore Gold will issue and sell to Franco-Nevada 10,050,591 common shares of the Company for C$15 million on a private placement basis. The price of C$1.49 per share represents a 5% premium to the volume weighted average trading price for Lake Shore Gold’s common shares on the Toronto Stock Exchange for the 10 trading days immediately preceding the announcement of the Agreement.

The Agreement is subject to standard conditions, including the approval of the Toronto Stock Exchange for the share issuance, with closing anticipated prior to the end of February, 2012.

BMO Capital Markets has acted as financial advisor to Lake Shore Gold in connection with the Agreement with Franco-Nevada.

About Lake Shore Gold
Lake Shore Gold is a rapidly growing mining company with a vision to become a mid-tier gold producer through the successful exploration, development and operation of its properties in and around the century-old Timmins Gold Camp. The Company is in commercial production at the Timmins Mine, has commenced pre-production development at the adjacent Thunder Creek deposit, and is advancing an underground advanced exploration program at its Bell Creek Mine. Mine production is delivered to the Company’s wholly owned mill (located on the Bell Creek Property east of Timmins) which is operational at a capacity of 2,000 tonnes per day and is currently being expanded to 3,000 tonnes per day with completion targeted for late 2012. The Company continues to invest aggressively in exploration at its multiple properties in and around the Timmins Camp. The Company’s common shares trade on the TSX and NYSE Amex under the symbol LSG.

FORWARD-LOOKING STATEMENTS

FOR FURTHER INFORMATION PLEASE CONTACT: Lake Shore Gold Corp.
Tony Makuch
President & CEO
(416) 703-6298
info@lsgold.com

Lake Shore Gold Corp.
Mark Utting
Vice-President, Investor Relations
(416) 703-6298
info@lsgold.com
www.lsgold.com

Source: Lake Shore Gold Corp.

That’s the way Anthony Campbell, the former head of the Intelligence Assessment Secretariat of the Privy Council Office, put it to me the other day. We were talking about Beijing’s designs on Canada’s energy resources, Beijing’s adroit cunning in enfeebling Canadian foreign policy, and how Canadians have been rendered unable to cope with the drama as it unfolds.

The Chinese Year of the Dragon began inauspiciously with Prime Minister Stephen Harper and Industry Minister Joe Oliver riffing on a clever talking-points stratagem dreamed up by neophyte Conservative war-room hangabouts. It featured American billionaire socialists infiltrating into Canada to ambuscade the construction of Canada’s last-hope economic lifeline, to China.

Most Canadians had probably never even heard of the Enbridge project, which is a plan to build a huge bitumen tube from Alberta’s oilsands to saltwater on the northern British Columbia coast. Still, whatever Ottawa was shouting about, it seemed to contain enough resemblance to a kernel of truth. So it worked for a while.

But what Harper and Oliver inadvertently opened up was a nasty and troubling question that nobody in Ottawa is particularly happy to hear people asking. Just what legally constitutes a foreign activity in Canada that is detrimental to this country’s national security interests these days, anyway?

As it turns out, Canada is practically incapable of answering that question with any enforceable coherence. When it comes to the recent and rapid-succession manoeuvres that have given Chinese state-owned entities the spigot key at critical flow points in Canada’s oil and gas industry, mysteries abound. But it is now clear that slowly but surely, Canada’s regulatory defences have been almost completely hollowed out.

A mere political millisecond ago, Canada was in an uproar over the Beijing-owned China Minmetals’ $4.7-billion bid to take over the Canadian mining giant Noranda. Beijing backed off in 2005, but the scare was enough to convince Ottawa that it needed to get around to closing the troubling Investment Canada Act loopholes that could easily allow foreign-government entities to easily take over Canadian economic assets unless someone was playing really close attention. But the loopholes weren’t closed, and the problem has only got worse.

After the China Minmetals scare, Industry Canada set up a Competition Policy Review panel that was supposed to come up with the means to cope with the national-security implications of foreign-government takeovers, but that key task was taken back from the panel in October, 2007. Two months later, Industry Canada quietly disclosed that the “national security” questions arising from takeovers by foreign government entities would be looked at through the same regulatory binoculars that Ottawa uses to examine investments in Canadian companies by private foreign firms.
Then, against the advice of intelligence experts and even some of the Conservative government’s closest friends, the federal cabinet approved regulations under the Act that deliberately avoided a definition of the term “national security.” Expert advice had called for the national-security implications to be spelled out in “concrete, objective, and transparent criteria.” Cabinet said no.

Instead, the September 2009 regulations granted whichever minister happened to be in charge of the industry and investment portfolio the discretion to decide for himself whether a “national security” threat was present in a bag of foreign money, on a bag by bag and case by case basis. Even private investment dealers have been flummoxed by it all. Cabinet pledges to clarify things have also gone by the wayside.

The upshot was that Canada’s foreign investment criteria ended up failing to explain what “national security” means, or to make regulatory distinction between ordinary private investors like, say, upstart roughnecks from Utah, and, say, entities like Sinopec, a secretive Chinese state-owned enterprise that answers to the Communist Party Central Committee in Beijing.

by Terry Glavin (Ottawa Citizen – February 4 2012)

Last year, the global population reached seven billion.

More than half of us now live in urban centres and experts estimate that figure will climb to 70% by 2050. China is witnessing the largest rural to urban migration in the history of mankind in its stampede to industrialize and modernize. China also has become the world’s second largest economy and currently needs to build the equivalent of two cities the size of Toronto and Sydney, Australia, every year to accommodate this rapid growth. India, Brazil, Russia, Indonesia and other developing countries are following in its footsteps but at a less frenzied pace.

According to a recent study by McKinsey & Company, “up to three billion more middle-class consumers will emerge in the next 20 years compared with 1.8 billion today, driving up demand for a range of different resources.”

Notwithstanding the current depressed prices of some metals, most analysts feel that the current mining commodity super-cycle will last for decades. It is estimated that over the next 25 years, we will need to dig out of the ground as many minerals as consumed since the beginning of time.

Prior to 2001, years of low commodity prices led to massive underinvestment in mining projects around the world.

During the dot.com boom/bust between 1995-2000, mining was often considered a sunset industry according many in the Toronto media. This negative and dismissive attitude toward the mining sector influenced politicians who did not understand the strategic value of mineral resources.

Combined with lower grade deposits that are much harder to find and usually located in more politically risky countries, skilled labour shortages, resource nationalism, increasing capital costs and more rigorous but appropriate environmental regulations, is it any wonder that political and military planners are now frequently talking about mineral shortages and its impact on industrial production.

Sudbury is the richest mining district in North America and among the top three hardrock mining regions in the world. Only South Africa’s Witwatersrand gold region and the country’s legendary Bushveld platinum complex can match the concentration and innovation of underground mining in the Sudbury Basin.

This mining knowledge makes Sudbury the luckiest city in North America.

The region is even more fortunate than Fort McMurray the booming oil sands capital of Alberta because Sudbury has four vibrant and innovative clusters of mining expertise.

Clusters are geographic concentrations of related companies in a specific field. They compete with each other resulting in global innovation and the jobs of the future. Internationally known Harvard professor Michael Porter has travelled around the world and advised many nations about the benefits of industrial clusters.

California’s Silicon Valley — south of San Francisco — is the most famous high-technology cluster in the world. Houston, Texas has established itself as the leading cluster of oil and gas industries, services, research and educational institutes related to that sector. Sudbury has established itself as one of the world’s primary centres of the underground mining innovation and excellence.

Our first cluster is the numerous polymetallic mines that have been producing nickel, copper, PGMs and many others metals for almost 130 years. The Ministry of Northern Development and Mines estimates that roughly $170 million was spent on exploration in the Sudbury Basin last year. A similar amount was spent throughout the entire province ten years ago. Many experts feel we will still be mining in Sudbury for at least another hundred years.

QuadraFNX’s Victoria mine, currently under construction will be one of the richest in decades. Xstrata’s Nickel Rim South mine started in 2009 and will be in operation for at least 15 years while Vale is working to bring its Totten mine — slightly delayed and over-budget — into production near the end of 2013. Vale is also spending $200 million on the Clarabell Mill complex to increase metal recovery and is investing an extraordinary $2 billion on their Copper Cliff smelter to further reduce sulphur emissions.

The Mckinsy & Company study states that the world must start “mobilizing for a resource revolution” and the “the race is on to boost resource supplies, overhaul their management, and change the game with new technologies.” Sudbury’s mining supply and services sector — our second cluster — is part of that “resource revolution” collectively using their innovative skills and technology to help keep the local miners among the most skilled, innovative and competitive globally.

There are more jobs in supply and services hardrock mining cluster — the largest in Canada and possibly North America — than in the region’s mines. The sector employs about 13,800 people with an economic value estimated at $4 billion in 2011.

Throughout Northern Ontario, the sector employs about 23,000 and produced roughly $6.5 billion of economic activity last year. Dick DeStefano deserves the credit for establishing the local industry organization — Sudbury Area Mining Supply and Service Association (SAMSSA) — and getting a ground-breaking study done that confirmed this cluster’s economic impact.

Companies like Fuller Industrial that export their specialty pipe products to mine projects in Madagascar and Mongolia, MTI Technologies, which sell their underground equipment globally and Bestech, an engineering, automation and software development company are largely independently owned with an entrepreneurial innovative mind-set. These and many other supply and service companies are putting Sudbury on the global mining map.

Third, Sudbury supports the largest cluster of post-secondary mining education in Canada that will only grow with the recent announcement of Laurentian’s International School of Mines initiative. This is attracting enormous interest from the corporate sector as the recent $10-million donation to the University’s Engineering School by Stan Bharti, chairman and CEO of Forbes & Manhattan Inc., a leading private bank with a global focus on the resource-based sectors.

According to the Mining Industry Human Resources Council, half of the current mining workforce is eligible for retirement by 2021 and between 75,280 and 141,540 people will need to be hired by then depending on the strength of the economy. The expertise of mining graduates from Sudbury’s colleges and university will be in demand around the world.

The final cluster is the mining research that is being done at Laurentian, CEMI, Vale, Xstrata and other locations. The Laurentian geology department’s Mineral Exploration Research Centre represents the largest concentration of geoscientists conducting ore deposit-related research in North America.

The affiliated Centre of Excellence in Mining Innovation (CEMI) focuses its research in mine process engineering, deep mining and environmental reclamation. In 2009, Rio Tinto, the third largest global miner, donated $10 million to further enhance CEMI’s research capabilities and establish a new global centre for underground mine construction.

Xstrata’s Technology Centre in Falconbridge and Vale’s expertise in underground mining research are helping establish Sudbury as Canada’s Silicon Valley of hardrock mining. We are in the biggest commodity super-cycle in the history of mankind.

From the perspective of a resource-starved world, Sudbury is lucky indeed.

Stan Sudol is a Toronto-based communications consultant and columnist who blogs at www.republicofmining.com