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By Karl J. C. Harries

"8.1. INTRODUCTIONThe purpose of this chapter is not to provide precedents or examples of provisions, but rather to offer some comments that may be worth considering in the negotiation or review of an agreement. These comments are not intended to be exhaustive. It must also be noted that, although the chapter is written in the context of a common law joint venture, the concepts and concerns for the most part apply equally to a corporation that is owned by only a few shareholders for the purpose of participating in the project held by the corporation.The corporation has the advantage of having much of its organization established by local corporate law, but the particular wishes of the shareholders will appear in a shareholders’ agreement. The principal differences will be surprisingly small, save for the acquisition provisions that appear in a farm-in agreement1 and the substantial portion of the joint venture agreement devoted to creating and organizing the joint venture entity. Where the joint venture agreement refers to venturers and committees, the shareholders’ agreement will refer to shareholders and the board of directors, but both will have to deal with such basic matters as decision-making, default, dispute resolution, first refusals, funding, and carrying out work on the project. For convenience, this chapter usually refers to “venturers”, which may be taken to include shareholders.Negotiations give rise to many varying circumstances and concerns, and the main asset of the negotiator is an open and flexible mind. A desired result can often be accomplished indirectly in circumstances where the other side has adopted an inflexible position on a suggested approach. As precedents and standard forms tend to focus a negotiator’s thinking, they can be counterproductive. It is after the deal has been agreed to that a precedent can be of great assistance to the draftsman.The concepts are arranged in alphabetical order for convenience, not to suggest their sequence or position in an agreement or their relative importance. An agreement should adopt a progression of subjects in what the parties consider a logical sequence to read and work with. However, experience has indicated that it is best to set out in a single article the substance of the deal (i.e. the terms relating to the farm-in and what the acquiring party has to do to acquire his interest), preferably near the beginning of an agreement. The acquisition of the interest is, after all, the first order of business. The joint venture provisions will then follow in a reasonable sequence. It is also worthwhile to devote a single article to any special provisions that may apply during the earn-in period. For example, it may be provided that, although all work is to be done by the acquiring party as operator (with the duty of care, liability, and reporting requirements as set out in the joint venture sections of the agreement), but during the acquisition period, the acquiring party, acting as operator, may be at liberty to do such work as he wishes, without the need for any committee or other approvals, and committee meetings may be suspended.2An agreement is divided into paragraphs and articles to make it easier for the parties to read and understand, and to assist a party in finding “that provision” when the need arises. A comprehensive table of contents will also assist the parties who must work under an agreement. An added benefit of a table of contents is that in preparing it, the draftsman sees the overall structure of the agreement and will often catch and correct flaws."

Jan 1, 2003

"Developed by CRIRSCO, IRT is a document that draws on the best of the CRIRSCO-style reporting standards. These reporting standards are recognised and adopted world-wide for market-related reporting and financial investment.The IRT is not an international reporting code and does not supersede existing national reporting standards. Rather it is a guideline that encapsulates the content of these standards for the benefit of the international mining industry and its various stakeholders.The template is a 'living document' that is continuously updated and improved as new national laws, rules, codes and guidelines are created or amended.The International Template is advisory only and where national codes already exist, these will take precedence. The International Template is intended to assist those countries that either do not have a reporting code or whose code is outdated, to produce a new code consistent with international best practice. It also provides a consolidated version of national codes that reflects their compatible international components and may thus be used in comparisons with other international reporting systems. The word 'Template' is used advisedly to indicate that this document is a model for code development and does not in itself constitute a 'code' which implies that it has legal or other regulatory force.From this point forward, the Template includes words that imply a mandatory action, such as ""requires"", ""applies"", ""must"" etc. This is to enable the Template to be easily adopted by countries and organisations wishing to do so, and does not imply that the Template itself is a mandatory reporting standard.INTRODUCTION2 In this edition of the International Reporting Template (""The Template""), important terms and their definitions are highlighted in bold text. The guidelines are placed after the respective Template clauses using indented italics. They are intended to provide assistance and guidance to readers for interpreting the application of the clauses in the Template.Indented italics are also used for Appendix 1 — 'Generic Terms and Equivalents"", and Table 1 —'Check List of Assessment and Reporting Criteria' to make it clear that they are also part of the guidelines for the application of the Template.Appendix 1 contains a table of generic terms and their equivalents, designed to avoid unnecessary duplication or ambiguity in the textAppendix 2 provides Rules of Conduct for Mineral Resource and Mineral Reserve estimators that may be considered in addition to the Codes of Ethics or Practice normally applying to members of professional institutions."

Jan 1, 2003

By Craig Haase

A. Introduction

Jan 1, 2003

By Karl J. C. Harries

"14.1. INTRODUCTION1The boilerplate of an agreement is not a single provision, but a series of provisions that are expected in “every agreement”. They are sometimes also referred to as the “lawyer’s provisions”. Many businessmen consider the boilerplate to be superfluous and, to some extent, window-dressing by the lawyers – even legalese. They will often offer advice to the effect that it can “pretty well be ignored”. Such advice could not be more wrong.Most boilerplate provisions are essential parts of every agreement. Some may be part of a “standard package” and may have little relevance to the agreement at hand, but these are the exception rather than the rule. The exceptions should not be treated as justification for giving all these provisions short shrift. The boilerplate should receive the same review, consideration, and negotiation as the provisions that set forth the business deal. It is often these provisions that make the deal work or that are turned to at the time of disputes. If they are inadequate, as they sometimes are (unfortunately, some draftsmen are also loath to review or update their standard boilerplate provisions or to tailor them to the deal at hand), they can create problems, rather than offer solutions. Such problems can be costly and time-consuming for the parties to address. Inadequate or incomplete provisions may ultimately be one of the reasons for the parties to turn to the courts to settle their differences. On the other hand, good boilerplate provisions can help keep them out of the courts.One of the principal objectives of an agreement should be to provide procedures, or mechanics, for implementing agreed principles and for the parties to follow to settle their differences, real or perceived, without going to the expense and disruption of a lawsuit. An agreement should aim to keep the parties away from the courts, not serve as a springboard to the courts. It must nevertheless be acknowledged that, if there is a major falling-out among the parties to an agreement, the chances are that, however carefully the provisions of that agreement have been negotiated and drafted, the parties will end up before the courts or some other adjudicating body."

Jan 1, 2003

By J F. Penrose

To obtain cost-efficient financing by way of securing an optimal credit rating, the operating and market risks of a single-asset mining project should be accommodated in the financial structure. Weak financing structures can cause projects to fail, as evidenced by the Murrin Murrin and Bulong examples; these can be compared to the investment-grade structure of Straits (Nifty), which managed operational, market, and financing risks well. Most mining projects are capital-intensive, and have heavy dependency on debt financing. A weak financial structure may result in the early failure of an otherwise sound and economically viable project. Appropriate management of technology, construction, and management risks generally will get a project built; of the project failures that occur, most are caused by a liquidity crisis as the project goes through ramp-up (the transition period between completion of construction and full operation). A projectÆs viability can be enhanced through sound hedging practices, while poor hedging can increase the likelihood of financial default.

Jan 1, 2003

By Dominic Howarth, Diana Drinkwater, Don McKee

"The pressures on mining and minerals education at the tertiary level are well known. Within Australia, for example, the number of undergraduate mining engineering courses with 30 or more students in each year has reduced to three (University of Queensland, University of New South Wales and Curtin University). Similar declines in both student numbers and participating institutions are evident in many other parts of the world, and notably in USA and most countries in Europe.An in depth study of the Australian sector was conducted in 1997/1998, resulting in the Back from the Brink report (Carter 1998). The Australian situation was summarised as follows.Australia’s minerals education system, in its current form, is fragile and is in no position to seize the opportunity (i.e. world leadership in minerals education) and is more likely to succumb to the threat.Current trends include:- an acute shortage of talented academic staff, as a result of University remuneration packages having become hopelessly uncompetitive with those in the minerals industry;- small student populations and high relative costs, making mineral specific courses vulnerable to closures, when Universities are under extreme cost pressures; this situation will be exacerbated if enrolments drop in response to, say, a cyclical down turn in the industry; and- under-resourcing of minerals departments because of their comparatively small size, making these departments incapable of delivering top class teaching in all aspects of their courses, despite being excellent in some areas.Most of the Australian issues identified above have direct parallels in other countries.The most common response of institutions to the threats is to seek strength, and in some cases survival, through various forms of linkages and networks. A number of these associations, which are frequently defensive in nature, are outlined in the paper."

Jan 1, 2003

By Larry A. Cramer

"Three primary drivers are setting the trend for base and precious metal processing . they are: continued low real base metal prices, environmental concerns, and continued high prices for PGM.s. Low base metal prices are increasing the search for economies of scale and company consolidation as well as the development of some hydrometallurgical technologies. Environmental concerns are pushing for continued reductions in SO2 emissions and hydrometallurgical technologies. The high prices for PGM.s are driving major expansions and a focus on minerals processing recoveries and, to a lesser extent, reductions in the refining metal lockup.In nickel, HPAL operations on laterites have failed economically but Inco is still pursuing some alternatives. BHP-Billiton and others are developing bioleaching alternatives for nickel laterites and sulphides.Copper continues to be dominated by the hydrometallurgical and pyrometallurgical debate; new hydrometallurgical developments are being tested at several sites whilst the pyrometallurgists continue to make competitive cost and environmental improvements.Gold processing developments are dominated by the use of improved gravity recovery equipment and by the development of thiosulphate as a more environmentally acceptable lixiviant.PGM processing trends are the use of fine grinding technologies, higher power input flotation cells, and new pyrometallurgical technologies. Hydrometallurgical options for some applications are being sought.OVERVIEW The metals industry has remained under price pressure for some time; low and decreasing real prices for most metals have become an expected scenario. Occasional price spikes give some relief but invariably bring expansions and new entrants into an already oversupplied commodity market, thus leading to the continued price pressure. Technical innovation, economies of scale, and improved work systems are continually sought, so as to improve the competitive position of each individual company in such a climate; however, these developments add to the downward price pressure. In such a situation the application of scarce funds to research and development is a difficult task. Excess funding is not available in tight economic times and yet the main route to higher profits is clearly the application of technical developments to lower the cost of producing a metal commodity. Many technical centers have closed as a cost saving exercise and some have coalesced to obtain economies of scale. The Australian based AMIRA research organisation has grown to serve the R&D part of the market well in Australia and in South Africa by acting as the catalyst to form research partnerships between a number of industry players and as an administrator to direct the funding of research projects towards the various applicable research institutions. AMIRA has developed closer ties to Camiro (Canadian Mining Research Organisation) through the appointment of Camiro.s metallurgical processing research director as AMIRA.s North American based director. AMIRA is continuing discussions with MIRO (Minerals Industry Research Organisation) in regard to a merger, with a report outlining the merger proposal expected in March of 2003. Company focused research centers continue to be effective at Anglo American Research Labs, Teck-Cominco Research, Falconbridge Research center, Inco Research and some others."

Jan 1, 2003

Jan 1, 2003

By Lawrence Devon Smith

"The concept of risk is well established in the mining industry. It is acknowledged when estimates of reserves are expressed as proven or probable, when mining and metallurgical recoveries are applied to the ore, and when contingencies are added to costs. However, it is difficult to provide a quantitative assessment of risk. The significant sources of risk in a mineral project and how these are addressed in project evaluations are discussed. The discount rate is examined as a fundamental means of reflecting risk in discounted cash flow evaluations. Current industry practice is discussed, and a methodology for the analysis of risk levels is proposed that assesses the constituent components of the discount rate: real interest, mineral project risks, and country risk.IntroductionThis paper examines the components of the discounted cash flow discount rate and proposes a method of estimating project-specific discount rates. The motivation for this work comes from experience of project evaluations in which owners and purchasers had agreed on virtually every aspect of the evaluation except how much the project was worth. Agreement was reached on reserves, grad~, recovery, capital costs, operating costs, taxes, and, by combining these components, even on the fmal cash flow values. The only difference in opinion concerned the discount rate to be used in the calculation of the net present value. Depending on the life of the project, such differences of opinion can cause a variation of more than 50% in the value placed on a project! This is illustrated in Figure 1."

Jan 1, 2003

By Grant C. Lukey, Jannie S. J. van Deventer

"The environmental effects of the mining and mineral industry include destruction of natural habitats, changes in river regimes and water tables, and other serious ecological impacts. In this century, it is likely that water will become a critical resource, and in most countries the mining industry competes for a share of this resource. The Kyoto Protocol may at first seem only relevant to the coal mining and power industry, however, it should not be forgotten that the mining and mineral industry is a significant consumer of power. Therefore the ratification of the Kyoto Protocol by most developed countries and the introduction of a carbon credit trading scheme will impact on the industry by potentially increased costs in utilities and waste discharges. It is clear therefore that the mining industry faces many challenges in the coming years. The mining industry?s commitment to sustainable development needs to continue to evolve, in order to meet these challenges effectively. With the advent of globalisation of the industry, it is now an opportune time for the industry to gain international agreement on how they want the industry to achieve sustainability in future years; such a progressive approach is necessary, otherwise government will force the industry to change, which may not necessarily be the best outcome for the industry.INTRODUCTIONThe Earth Summit in Rio de Janeiro in 1992 was an opportunity for world leaders to assemble and discuss strategies and initiatives that provide for further industrial growth without adverse effects on the environment. The World Summit on Sustainable Development held last year in Johannesburg, South Africa, was an opportunity to evaluate those initiatives implemented over the past 10 years, and to set a new and sustainable direction for the future. It is clear that industrial and technology development will continue at a rapid pace in order to serve the needs of a growing world population, but it is essential that the course of this development is well planned, well executed, and that it is sustainable. In reality, while government officials and politicians continue to debate policy and international protocols, the environment continues to suffer and the effects of climate change and global-warming become more real each day."

Jan 1, 2003

By Lawrence Devon Smith

"This paper examines the impact of the various assumptions that go into an economic evaluation, and shows how these can be combined to show an exciting result that may not really exist. An example of an embellished case (the kind that one frequently sees when projects are being promoted) is developed and the cumulative impact is analysed to show the actual project underneath. The paper also points out some areas to watch for overly optimistic assumptions such as prices, inflation, and debt. The concept of a ""bare bones"" base case is proposed (constant metal prices, constant dollars, no inflation, no debt, no interest, on a project basis, after tax) as a common reference point.As well, the discount rate is examined as a fundamental means of reflecting risk in discounted cash flow evaluations. Current industry practice is discussed, and a methodology for the analysis of risk levels is proposed that assesses the constituent components of the discount rate: real interest, mineral project risks, and country risk.INTRODUCTIONOften, the first time that all of the technical and economic data for a mineral project comes together in one place is when the economic evaluation is developed. This typically happens when work on the project has progressed to a sufficient level of detail that the effort to produce a year-by-year cash flow is justified, usually at the pre-feasibility or feasibility study stage. The data involved will include:• production; tonnes waste and ore mined, ore grade, mining recovery, metallurgical recovery, metal sold• revenue; metal price, smelting & refining charges, marketing costs• operating Costs; mining, milling, administration, fees, royalties• capital Costs; exploration, development, construction, indirect costs (engineering, management), contingencies, start-up, inventories, working capital, replacement and sustaining capital, closure costs• taxes and royalties• exclusions; depreciation (this is not a cash item), sunk costs (only costs going forward)."

Jan 1, 2003

By James A. Finch

"Developed countries are in the midst of re-structuring education in minerals-related disciplines as raw materials, once vital to wealth generation, contribute progressively less to the economy. The changing circumstances mean institutions must justify mineral processing by new criteria. After considering what a mineral processor needs to know the ways to deliver are considered. Taking twenty graduates per year to illustrate, one institute could justify this number as a program in a department or school (of whatever grouping of disciplines). A strong research component would make the package additionally attractive. Divide among four institutions and mineral processing is best served in a research centre with delivery taking advantage of multi-centre and distance learning opportunities.INTRODUCTIONThis is one of five plenary lectures at the Congress. I may have preferred a technical subject, as that is what occupies most of my thinking hours, but it is reasonable as an academic that this topic should come to one of us. The fact the topic has not been high on my agenda may provide one advantage: that I can suggest directions free of pre-conceived notions, just as when reviewing the background to a technical article the temptation to select in support of one?s interpretations is resisted. The trick will be to add something new.One reading of the title seems to query whether mineral processing education has a future. (I will refrain at this juncture from defining mineral processing and assume for now we share an understanding of the term.) The proximity of natural and human resources led to the Industrial Revolution and the interaction continues to stimulate and sustain industrial and economic development in many parts of the world. The search for raw materials has historically played a key role in opening frontier areas, with undersea and outer space next. The reason is obvious: raw materials along with food and energy underpin society. Thus mining will remain part of human activity along with the need to pass on the knowledge and skills.What happens over time is resource relocation. Raw materials become exhausted in one area to be replaced by sources elsewhere; the demand for some materials lessens while growing for others. Educational institutions can find themselves with the wrong geography or with staff focussing on the wrong subjects. When this happens the restructuring produces much discussion. This is where we are in parts of the world. Japan, Western Europe and the United States are the prominent examples (Dowd, 1998; Flemings and Suresh, 2001; McDivitt, 2002). Mineral processing is becoming a series of courses in related disciplines: resource engineering, environment engineering or materials engineering. The start of the transition is evident in Canada and Australia, perhaps earlier than expected given the contribution of raw materials to their economies. A common backdrop in the developed countries is social pressure to reduce the impact of the ?untidy? aspects of life, and that includes mining. (This is not new: in classical times the mine face was the preserve of slaves and convicts.) These values are exportable, potentially affecting recruitment into mining schools everywhere."

Jan 1, 2003

By Karl J. C. Harries

Mineral Agreements and Royalties

Jan 1, 2003

By S Hayton

While coal seam gas is considered to be an unconventional gas, the proliferation of areas under exploration and development mean that it is rapidly becoming main stream. The potential of New Zealand's coals to produce coal seam gas has been recognised for some time. However, key market drivers have not been suitable for the progression of this potential into reality. Kenham Holdings Ltd and CRL Energy Ltd, recognising the potential for the gas in New Zealand have initiated what is the largest ever assessment of New Zealand's coal seam gas potential. The premature demise of the giant Maui field has raised the focus of new gas developments and has increased interest in what we are doing. Over the past couple of years Kenham Holdings Ltd and CRL Energy Ltd have approached the assessment of the coal seam gas potential in a staged programme. Preliminary assessment of the data on the permit areas indicates that the potential resource may be up to 500 PJ. To date, preliminary appraisals have been completed or are underway on a significant number of fields. Exploratory drilling has been completed or initiated on several of those fields, with results from this work being fed into the preliminary modelling as it has become available. Given that in many of these areas there is no pre-existing information concerning their gas potential and world wide experience with lignite is practically nonexistent, it has been a steep learning curve with many surprises. However, initial gas content results and preliminary gas flow models have been on the whole, rather pleasing, with the commerciality of some developments already apparent.

Jan 1, 2003

By Lauri Gregg

How Can Man Meet the Carbon-Free Energy Challenge ? ? Increases in Energy Efficiency can displace 1/2 to 2/3 of the Carbon-Free Energy required to stabilize at 550 ppmv ? Renewable Energies require too much land and thus can displace 5 to 10 % of the energy requirement ? Large new sources of carbon free energy are needed ? Conservation is desirable but provides only a small and variable contribution ? People will have to adjust to higher levels of CO2 in the atmosphere as energy demand continues to grow

Nov 1, 2002

By Corinne Boone

CO2e.com, LLC - launched in November 2000 - aims to be ?the global hub for carbon commerce.? CO2e.com is a subsidiary of the Cantor Fitzgerald Group, one of the world?s leading brokerage firms Recent Investor in CO2e ? Mitsui & Co. Alliance with Cantor Fitzgerald Environmental Brokerage Services Group (CFEBS) Offices in London, Toronto, Tokyo, New York, San Francisco, Los Angeles, Connecticut, Houston Primary Goals/Benefits of ET § Goals of Emissions Trading: ? Permit Industrial Growth/Expansion ? Promote Economic Efficiency and Flexibility in Meeting Air Pollution Standards § Benefits of Emissions Trading: ? Enhance Air Quality w/o Economic Stagnation ? Encourage Development of New Technology ? Foster Most Efficient Use of a Limited Resource -- Clean Air § Contributes to Sustainable Development and objectives of UNFCCC, Kyoto Protocol?.

Nov 1, 2002

By Rick Hyndman

? Context: Ø Global action on climate change ? The situation of trade-exposed industry sectors ? The federal government?s draft plan for industry ? CAPP?s position ? Canadian emissions & Canada?s Kyoto target Simple Economic Theory of Dealing with Externalities ? Put cost on emissions Ø Carbon tax Ø Emission trading with auctioned permits ? GHG costs get reflected in the prices of energy alternatives, goods & services Ø Decisions driven by changes in relative prices ? Switching to lower emission fuels ? More energy efficient ways of producing ? More energy efficient appliances, cars, housing ? Reduced demand for energy intensive goods & services ? Anticipation of higher CO2 price drives low CO2 technology Development

Nov 1, 2002

By Doug Russell

Natsource: At a Glance l 160 employees l Global reach ? New York, Washington, Calgary, Ottawa, Toronto, London, Tokyo l Major Environmental Commodity Broker ? Rated as Top GHG Broker (Environmental Finance Magazine Survey, Dec. 2000 & 2001) ? Leading RECs Broker ? Large Broker of SO2, NOx l Large Energy Broker ? One of Highest Volume Gas Brokers ? Major Electricity Broker Overview l International Market l Implementing the Rate-Based Proposal l Assessment and Management of Risk from GHG Emissions Limitations

Nov 1, 2002

Building off the enthusiasm generated by Credit Suisse First Boston on the potential benefits of an industry-wide effort to market gold jewellery, a group of gold producers, led by Randall Oliphant, CEO of Barrick Gold, decides to investigate the long -term impact of launching a significant marketing initiative to stimulate demand for gold jewellery. The group establishes an international Steering Committee representing producers of differing sizes, members and non-members of the World Gold Council. This Committee comprises representatives from AngloGold, Barrick, Gympie Gold, Kinross, Randgold, and Sons of Gwalia and is supported by the Australian Gold Council, the Gold and Silver Institute, and CSFB. The Steering Committee hires McKinsey to assist it by conducting an independent review of whether investment in a large-scale marketing initiative for gold jewellery would be effective in increasing demand for gold, and ultimately of significant economic benefit of the gold industry. Based on McKinsey?s review* and its own discussions with key stakeholders across the industry, the Steering Committee strongly believes the case for marketing is compelling and sufficiently proven to persuade the industry to undertake a major initiative over the next few years. The Steering Committee, supported by McKinsey, conducts briefings with a range of gold producers to share its findings and to understand producers? perspectives on an industry-funded marketing campaign. The Steering Committee is asking for your support to bring this industry-funded marketing campaign to life.

May 1, 2002

By Maureen E. Lipkewich

Education builds long term awareness, acceptance and support for responsible mineral resource development. The MABC Education Program is an award winning education partnership with British Columbia classroom teachers that has helped over 5400 teachers with resources and other learning opportunities. Each year, thousands of students begin, and continue, to learn about our modern mineral industry as a result of this teacher-written program. The CIM network has an integral role in the future of mineral education in today?s classrooms in Canada and programs of this caliber are vital to our future. The industry needs help in raising awareness of the benefits of modern mining and teachers need help in acquiring that information.

May 1, 2002