When we think of metal, we think of obvious applications like ships, airplanes, cars, steel buildings, and jewelry. What we don’t tend to think about are the countless ways in which many metals are essential to us on a daily, hourly, or even minute-to-minute basis.
Did you know that our smartphones depend on gold for their displays and circuitry? And, there is no easy substitute. If there were, the likes of Apple and Samsung would not be using such an expensive metal. The same goes for other metals like silver, cobalt, graphite, aluminum, copper, tungsten and nickel.
The fact is that metals are essential to our modern, technologically advanced world. And without mining and the extraction of these metals, such technology would not be possible. Mining is not some outdated industry that’s being eclipsed by tech and knowledge industries. Our future depends on mining. And for investors, the demand for certain metals is undoubtedly growing for the foreseeable future.
Still, mining has to evolve. Those of us in the industry have to innovate. We need to employ cutting-edge technology and processes to increase efficiency and deliver high returns. And, we must operate in an environmentally responsible way—not just by employing PR firms to devise clever slogans but committing ourselves to projects and to practices that are genuinely responsible.
Thoroughly Modern Miners
This may sound like a funny turn of phrase, and perhaps it is. But I do think it’s vital that those of industry strive to be thoroughly modern miners. This idea has become something of a mantra at the companies I’ve had the pleasure to create, lead and participate in—we strive to be thought leaders with regards to innovative projects and processes as well as responsible leaders of environment management.
There is an odd incongruity between the perception of mining companies, and the motivations of many of those involved in the industry. On the one hand, the perception from the outside tends to be of the old fashioned mining company in the 1960s or 70s. People think of mining as an inherently dirty, damaging business, and imagine firms run by CEOs who care little about the environmental impact of their projects or the communities in which they operate.
On the other hand, many of us in the industry, myself included, were drawn to discovering and developing mines as an extension of our love of the outdoors. As professional geologists, we spent the early part of our careers out working in the field, using our hands, collecting samples, and exploring. That’s our element, and we have a deep, enduring, appreciation for and understanding of our natural world.
Fortunately, with a modern approach to mining, and better ways of communicating, this chasm in perception can be bridged, and we can develop exciting projects that can be both responsible and profitable, all the while providing the essential ingredients needed for our modern technologydriven society.
Oxygen Capital, like other environmentally aware companies, is not simply about the next transaction. We see ourselves as part of the global movement towards a greener future and as contributing members of each community where we operate. We have built our business model with a more sustainable ethos; we are borrowing the land to deliver the supply chain of metals and minerals for a cleaner, more prosperous future. And we will restore a fully productive ecosystem once the mine has closed. Based on projected global population growth and urbanization, the financial windfall for the mining industry could be tremendous, but the benefits of an environmentally forward-thinking approach are immeasurable.
The past few years have been challenging for miners, both from a capital raising standpoint and as a place for investors. Mining and resource exploration have seen a loss of investment capital and investor interest, as funds have migrated to passively managed ETFs, and actively managed money has chased the cannabis trade. Some dismiss mining as an industry in decline. Nothing could be further from the truth.
The mining industry will be an invaluable source of materials for the green technology revolution. From fingerprint sensors and GPS systems to medical technology, wind turbines and solar panels, mining supplies the metals required for a growing number of applications that are indispensable to our modern life.
Metals will remain in demand as technology continues to advance. The increasingly popular EV car, for example, uses up to four times (~40kg – ~80kg) the amount of copper compared to a combustion engine car. Solar panels use nearly 20 different metals and minerals.
Gold is also at the heart of new technologies being developed today to help society tackle some of our biggest challenges. According to the World Gold Council, in 2017, the amount of gold used in technology rose by 3% to 332.8 tonnes. To put this in perspective, that is approximately 100 years worth of production at Pure Gold’s (TSX-V: PGM) Madsen Red Lake Gold Mine. According to the US Geological Survey, 34% of the gold used in the United States in 2017 was for electronics.
Add to this the demand for metals coming from emerging economies. In countries such as China, a growing middle class is now experiencing first-time access to modern infrastructure and cleaner alternative transportation options such as EV bus or rail transportation.
As a result, the growth we are seeing is unprecedented. I fundamentally believe that the mining sector is going to have a renaissance as the demand for green technologies puts a magnified focus on the need for metals in our modern lives.
Canada could not be better positioned to supply these metals, with our technical and financial expertise, rich geology and political stability. In February this year, the Fraser Institute’s 21st Annual Survey of Mining Companies listed Canada as the world’s most attractive region for investment – beating out Australia for the top spot.
Fifty years ago, the risk associated with the mining sector was largely the deposit itself: the grade, size of the deposit, or other physical attributes. Those “underground” risks still exist, but the risk factors in mining have now increased above ground, and could include regulatory, social, and geo-political risk. Addressing these risks from day one goes hand in hand with a sustainable ethos. For instance, a sustainable project should benefit the local community, such as with initiatives to promote local employment, improvements to the quality of life and environmental protection. If you integrate these components into a project right from the start, you have also vastly increased the project’s long-term potential and overall chances of success.
Applying this modern ethos, Oxygen Capital has successfully discovered orebodies, developed mines and created impressive returns for investors. We have founded nine mining companies since 2001 and sold five companies in a row, creating well over $3 billion in shareholder value. Currently, our team at Pure Gold Mining has set out to advance the Madsen Red Lake Gold Mine, which is on the cusp of becoming Canada’s next major high-grade gold mine.
The mining industry will be an invaluable source of materials for the green technology revolution.
Pure Gold Mining’s Madsen Red Lake Gold Mine, which completed its feasibility study in February of this year and aims to pour gold by mid-2020, is an example of such a sustainable project. We are rising to the challenge of reopening an historical gold mine, which was built in the 1930s and made no provision for mine closure and reclamation. By rethinking the mine design, with closure objectives and substantially improved environmental performance as key guides, this project is far more than a “reopening”. The carefully thoughtout plan for operations sees the introduction of water treatment, material harvesting, and progressive closure, reclamation and restoration to productive ecosystems.
The site at Madsen Red Lake has already been substantially cleaned up and mine closure activities will start during operations, with over half of the tailings facility closed midway through the mine life. At the end of mine life, the remaining mine disturbance areas will be reclaimed, along with the old legacy mine. The planned reclamation will enhance the environment with closure design to include grassland, wetlands and forested areas. Downstream water quality will immediately be improved on reopening and improved further on closure to support species including wolverines, moose, bats and fish. Red Lake is a popular sport fishing destination, so it is important to get this right.
The Madsen Red Lake Gold Mine will also become a major local employer to the Red Lake community at a time when the Red Lake mine complex itself is a sunset asset. The project is quite simply the future of the Red Lake camp.
This is how Pure Gold is contributing to the future legacy of mining in Red Lake, one that creates opportunity to grow new industries in a safe, sustainable environment.
The Madsen Red Lake Gold Mine is now entering the final permitting process and Pure Gold is closing in on its goal to become the next iconic Canadian Gold producer. Madsen is currently the highest-grade gold development project in Canada.
With the potential for production for decades to come from new exploration targets and a carefully designed operations and closure plan, the Madsen Red Lake Gold Mine is being reopened to modern environmental and engineering standards. With this new major gold mine, we are putting our ethos into action and setting the bar for projects to follow.
We, as miners, are on the front lines of discovery, development and job creation. We are creating the supply chain of materials necessary for our technology-filled lives. And for a cleaner environment. But it is also up to us to set the benchmark for mining now and in the future. We are stewards for natural resources; for those of us who are on the front lines, I say, who better to lead the way?
