Mining the North. Prospects North 2013 Conference Tom Hoefer: September 10, Key Messages

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1 Mining the North Prospects North 2013 Conference Tom Hoefer: September 10, 2013 Key Messages Mining is our economic strength We have opportunities before us But we are in an investment crisis We are strengthening our investment climate 2

2 We are a land of resource opportunity Tremendous mineral potential 8 geological provinces spell diverse mineralogy Gold, silver, diamonds, lead, zinc, uranium, tungsten, rare earths, cobalt, bismuth, nickel, copper, iron, etc. Under mapped & under explored (equals opportunity) 3 Over $60 billion mined since 1932 Zinc 30% Gold 18% Diamonds 38% Uranium 1% Silver 2% Lead 8% Tungsten 3% Past Producing Mines: Ekati Diavik Snap Lake Con Giant Lupin Polaris Nanisivik Pine Point Cantung Discovery Rankin Nickel Rayrock Outpost Island Supercrest Eldorado Ruth Terra Norex Silver Bay Colomac Tundra Camlaren Contact Lake Ptarmigan Tom Mon CullatonLake Salmita Hope Bay 4 Negus Thompson Lundmark Rich El Bonanza Rycon Bullmoose

3 We can capture the world stage 2012 Global Diamond by Carats (Total global is 128 million cts) 2012 Global Diamond by $ Value (Total global is US$12.6b) Other 22% Russia 28% Other 21% Botswana 23% Canada 8% South Africa 8% Zimbabwe 9% Botswana 16% Democratic Republic of Congo 17% Angola 9% Canada 16% Russia 23% NWT by itself is 5 th largest global diamond producer NWT by itself is the 3 rd most valuable 5 Mining has contributed to Infrastructure Highways, eg, to Yellowknife, Pine Point & Ft. Resolution Railway to Hay River & Pine Point All 3 NWT hydro electric facilities Ice road technology Microwave communications Ports at Nanisivik and Polaris 6

4 We develop and use creative technologies too Energy High efficiency diesel power Leading wind Engineering Dikes Ice roads Heat recovery on Diavik diesels Diavik wind turbines Top Canadian engineering award for Diavik dikes 7 Engineered ice road highways Current production is from 5 mines Ekati (diamonds) Diavik (diamonds) Meadowbank (gold) CanTung (tungsten) Snap Lake (diamonds) Past Producing Mines: Con Giant Lupin Polaris Nanisivik Pine Point Cantung Discovery Rankin Nickel Rayrock Outpost Island Supercrest Eldorado Ruth Terra Norex Silver Bay Colomac Tundra Camlaren Contact Lake Ptarmigan Tom Mon Cullaton Lake Salmita Hope Bay Negus 8 Thompson Lundmark Rich El Bonanza Rycon Bullmoose

5 Ekati Canada s first and largest diamond mine 9 Diavik NWT s largest producer of diamonds Summer

6 Northern mining in its real colours 11 Snap Lake our first all underground diamond mine 12

7 Cantung mine the Western World's largest producer of tungsten concentrate 13 Meadowbank mine, NU Celebrating 1 million ounces gold 14

8 Mining production is significant NWT, Nunavut and Yukon Mining Production $2,500 $2,000 NWT Nunavut Yukon $1,667 $2,112 $1,790 $1,638 $1,831 $2,123 $2,045 $2,140 1,722 $C Millions $1,500 $1,000 $653 $682 $779 $874 $1, $500 $349 $385 $321 $272 $317 $427 $0 $35 $35 $4 $32 $35 $13 $ (p) Natural Resources Canada March Mining is the largest private sector contributor in Nunavut and NWT NWT GDP (2009) NUNAVUT GDP (2011) Other 27% Mining 29% Health 5% Other 22% Mining 19% Construction 12% Public Admin 12% Real Estate 12% Oil & Gas 4% Construction 9% Transportation 7% Education 8% Public Admin 22% Real Estate 12% Mining also contributes additional benefits to other sectors, eg, construction, transportation and real estate. 16

9 Mining benefits continue to increase : diamond mines exceeded expectations 19,000 person years northern jobs 50% Aboriginal Over $9.3 billion northern business $4 billion Aboriginal Nunavut s gold mine is creating similar local benefits Mining is the largest employer of Aboriginal people 17 Download at: Fuelled huge Aboriginal business growth Diamonds helped create many new Aboriginal companies Ekati Services I&D Management Services Ltd. TliCho Logistics TliCho Landtran TliCho Cement TliCho Air Denesoline Western Explosives Metcon TliCho Explosives Kete Whii Ltd. Kete Whii Procon Sodexho Alliance Exploration Medical Services Kitikmeot Cementation Lac De Gras Constructors Nishi Khon SNC Lavalin Inc. North Slave Logistics Nuna Logistics SecureCheck Lac De Gras Constructors Nishi Khon / SNC Lavalin Inc. Det'on Cho Earth Energy Det'on Cho DNX BouwaWhee Det'on Cho Foraco Det'on Cho Hazco Det'on Cho Nahanni Construction Det'on Cho New North Det'on Cho NUNA Det'on Cho Pure Earth Elements Environmental Solutions Det'on Cho Scarlet Security Det'on Cho Stantec Det'on Cho Training and Conference Centre Det on Cho Logistics Det on Cho Medic North Det on Cho Mining Supplies DICAN / ADG Kete Whii / Ledcor Kete Whii / Procon Akaitcho Helicopters Dene Emco Ltd. Denesoline/Aboriginal Engineering Ltd. Denesoline/Air Tindi Joint Venture Denesoline/Arcan Constructio Denesoline/De Beers Labour Contract Denesoline/Discovery Mining Services Logistics Expediting Denesoline/Deton Cho/Procon Denesoline/Deton Cho/Ledcor Denesoline/Dyno Nobel Denesoline/ESS Compass Denesoline/McCaw Drilling and Blasting Denesoline/Nuna Logistics Denesoline/Tlicho Logistics Lutsel K e Air Services A.T.B. Construction Trinity Helicopters 18

10 Tli Cho Investment Corporation 23 member companies 450 employees Over $180 million annual revenues 19 YK Dene First Nation s Det oncho Corporation Built on the mining industry 16 member companies Over 300 employees Annual earnings more than $87 million 20

11 Tremendous Benefits but our mines won t last forever Mine lives years Ekati Diavik Snap Lake Cantung Meadowbank 21 We have opportunities before us Selwyn (base metals) Izok (base metals) High Lake (base metals) Hope Bay (gold) Mary River (iron) NICO (gold,cobalt, bismuth) Prairie Creek (base metals, silver) YK Gold (gold) Pine Point (base metals) In or through approvals Close to entering approvals process Gahcho Kue (diamonds) Nechalacho (rare earths) Back River (gold) Kiggavik (uranium) Meliadine (gold) 22

12 The Optimist s View Nunavut mines potentially 10 new mines Capital investment over $10b Jobs at peak (overlap) over 7,000 Total person years employment nearly 100,000 Total life of project expenditures $35b NWT mine potentially 6 new mines Capital investment about $2b Jobs at peak about 1,650 Total person years employment about 25,000 Total life of project expenditures about $12b CAUTION: Project timing and opportunities are subject to market prices & conditions, regulatory approvals and timing, investor approval, etc. 23 The optimist s challenges Market price uncertainty, eg, diamonds & gold Junior investment capital crisis lose 500 companies? Big corporations retrenching Gold price one year to July

13 Investment is currently declining NWT, Nunavut and Yukon Mineral Exploration $600 $C Millions $500 $400 $300 $200 NWT Nunavut Yukon $100 $ Natural Resources Canada March But take heart! One reality of the market place that we know This too shall pass! 26

14 Now s a good time to get ready We can t change the marketplace, but we can change ourselves let s be ready when the market rises again. 27 Improving regulatory process We are taking action NWT Surface Rights Board Act, NU Project Planning & Assessment Act MVRMA modernization and amendment Creating strategic action plans NWT Mineral Development Strategy, Economic Opportunities Forum NWT Corridors for Canada Transportation Strategy NWT Energy Strategy NU Economic Forum Advancing land use plans (Tlicho, Sahtu, Nunavut) Investing in Geoscience & Training Prime Minister tour Transferring control to a local landlord through devolution Yukon devolution strengthened their minerals industry 28

15 Conclusion Clearly, we are doing well by our mining industry But our mines won t last forever We do have opportunities before us But they are not slam dunks we have challenges too But we are taking appropriate actions to support and strengthen our #1 industry 29 Thank you! Mahsi cho! 30