CIM conference focuses on risk

Battle Mountain Gold (TSE) expects to secure financing for the development of its Kori Kollo gold property in Bolivia by the end of the first quarter, says Chairman Karl Elers, a speaker at the seventh annual symposium of the Canadian Institute of Mining, Metallurgy and Petroleum’s mineral economics committee. Topic was “Back to basics: managing the risks to reap the rewards.”

Speaking at the symposium, Elers said the mine, in which Battle Mountain holds an 85% interest, will produce about 245,000 oz. gold per year at a cash cost of US$110-120 per oz.

If all goes according to schedule, the project will have advanced from initial exploration to production at 15,000 tons per day in just under four years.

“That is a difficult feat to accomplish in North America today,” Elers told the audience. “We believe (Kori Kollo) makes an excellent case for internationalization and an excellent case for the opportunities that exist in Latin America.”

Asked to deliver a case study of country/political risks in the mining industry, Elers chose Kori Kollo as a model of how those risks, including expropriation and currency controls, are declining in some countries previously shunned by the North American mining industry. Meanwhile, political risks of a different kind are making mining in North America less attractive.

The talk wrapped up the day-long symposium which featured discussions on exploration and operations risks through to environmental and marketing risks. About 125 people attended the symposium, down from 150 last year but still a healthy turnout considering the current recession.

John Kearney, president of Northgate Exploration (TSE), delivered a lively luncheon speech outlining some of the risks encountered, and not always well-managed, by Northgate, particularly with respect to the failed Colomac gold mine in northern Canada.

In sharp contrast to the optimistic tone adopted by Elers, Kearney also condemned the regulatory and public image nightmare facing Northgate affiliate Geddes Resources (TSE) as it strives to develop the Windy Craggy copper deposit in British Columbia.

“Geddes has put almost $50 million into the exploration of Windy Craggy and has proved up one of the largest copper deposits in the world,” said Kearney. But the project is in trouble. “Is this an environmental risk, or a country risk, or a political risk? How do you manage it? I would suggest that it is a problem not just for Geddes, or for Northgate, but perhaps for the entire Canadian mining industry.”